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Wonkish Clarification Of Obamacare "Risk Corridors." The GOP Is Wrong Again

January 23, 2014, 6:04 am
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#5. Pray for Healing.
#6. Die Quickly.

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"[P]erhaps the most important point here is this: any conservative reform plan for universal coverage will have to use similar methods of risk adjustment. The point here is simple - if you want insurers to participate more broadly in the individual market, you'll need to offer a carrot to offset the unavoidable uncertainties. And railing against risk corridors now will make them a hard sell further down the road. Risk adjustment mechanisms get you the buy-in of insurers, but they also helps keep premiums at manageable levels while insurers develop enough experience to properly price plans on their own. This helps encourage people to enroll in these plans, which in turn helps insurers develop the necessary pricing experience - resulting in a virtuous cycle." Yevgeniy Feyman in Forbes.



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