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Ticket to Fraud

5:47 AM, Jul 8, 2013 • By DANIEL HALPER
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Yuval Levin, writing for National Revew Online:

The delay of the individual mandate announced on Tuesday and the delay of the verification requirements for eligibility announced on Friday both suggest the same two kinds of problems: logistical difficulties with getting complex systems into place, and the fear of ending up with too few people in the exchanges.

The first of these is straightforward enough, and has tended to be the public reason offered for these delays. But the second is clearly also a major concern for champions of the law. If not enough people sign up for the exchanges, the system could end up with an insufficient and unsustainable insurance pool—too few healthy people to balance the sick ones and fund the cost of their care. The premium shock—that is, the fact that relatively healthy people will face much higher insurance premiums under the new system than they face today—that looks likely to be prevalent in the exchanges in almost every state could well drive younger and healthier people away, the penalty for remaining uninsured (the so-called “individual mandate”) may not be high enough at first to keep them in the system, and many people may also be inclined to wait and see how the exchanges shape up before they join.

This concern is very high on the agenda of those implementing the law. It is why they are investing in a huge PR effort to drive enrollment. It is surely part of the reason for delaying the employer mandate—allowing some large employers to dump their workers into the exchanges without a penalty. And it seems very likely also to be a key factor behind the decision to allow people access to the exchange subsidies without proving they actually qualify for them.

Opening the door wide open to fraud could well increase the number of people in the exchanges, but it will also make that number far less meaningful—casting a shadow over whatever is achieved by the enrollment effort set to launch in the fall. It will also, needless to say, increase the cost of the exchange subsidies. The administration is clearly worried enough about enrollment to take that risk and bear that cost. It seems to be operating under the assumption that the way to secure Obamacare’s future is to get as many people as possible into the system and receiving subsidies. Maybe they’re right, and maybe they’re wrong, but they certainly seem increasingly desperate.

Whole thing here.

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