Douthat doubts the fix Obama announced last week will have much of an impact. As an alternative, he suggests rewriting Obamacare’s regulations “to allow insurers to sell less comprehensive plans on the exchanges”:
What partial deregulation would accomplish … is to allow some of the lower-cost plans the law abolishes to be actually revived and made available on the exchanges as “bronze” options in 2014 and 2015, rather than just temporarily grandfathered for a year or so outside them. And this would have two potential upsides for Obamacare. First, it would ease the rate shock that people with cancelled plans experience when they go shopping for new coverage on the exchanges (and in the process hedge against potential further rate increases in the new few years). And second, it would offer a carrot, in the form of cheaper options than the exchanges currently provide, to lure in some of the uninsured who might otherwise be more inclined than the White House expected to just pay the fine (or dodge it) and continue without coverage. (If you want more people to buy a product from your website, figuring out a way to lower the price is a time-tested method …)
Barro pushes back:
We should expect that catastrophic plans will be about 5% cheaper than bronze plans.
Opening these plans up to the broader market would help a little with sticker shock, but not very much. The insurance consultancy Milliman warns that ACA rules “may make it hard to differentiate” between catastrophic and bronze plans, since the catastrophic plans and bronze plans must both limit out-of-pocket expenses to $6,350 for an individual subscriber.
[Harold] Pollock’s suggestion is to tweak the definition of “essential health benefits” under the Affordable Care Act. In other words, he’d hold down premiums by letting insurers exclude more items from coverage. But it’s not clear what these exclusions could be, and Pollack doesn’t make specific suggestions. The additions that add lots of cost (mental health coverage, prescription drugs, substance abuse treatment) tend to be pretty important components of health care.
We can tinker a little with the comprehensiveness of coverage, both in terms of what services of covered and what fraction of the bills the insurer will pay. But there is no “fix” to the fact that the ACA creates a shadow fiscal transfer by charging higher health insurance premiums to healthy people in order to subsidize coverage for the sick.
The Dish 