Chuckle of the Day: Times Notices How Banning Pre-Existing Conditions Causes Premiums to Skyrocket, Calls It "An Unintended Consequence"

Thanks for the link from JFW.
By unintended consequence I think they mean patterns pointed out ahead of time by Republicans, Talk Radio, the right wing blogosphere, etc...

New York’s insurance system has been a working laboratory for the core provision of the new federal health care law — insurance even for those who are already sick and facing huge medical bills — and an expensive lesson in unplanned consequences. Premiums for individual and small group policies have risen so high that state officials and patient advocates say that New York’s extensive insurance safety net for people like Ms. Welles is falling apart.

The problem stems in part from the state’s high medical costs and in part from its stringent requirements on insurance companies in the individual and small group market. In 1993, motivated by stories of suffering AIDS patients, the state became one of the first to require insurers to extend individual or small group coverage to anyone with pre-existing illnesses.

New York also became one of the few states that require insurers within each region of the state to charge the same rates for the same benefits, regardless of whether people are old or young, male or female, smokers or nonsmokers, high risk or low risk.

Healthy people, in effect, began to subsidize people who needed more health care. The healthier customers soon discovered that the high premiums were not worth it and dropped out of the plans. The pool of insured people shrank to the point where most of them had high health care needs. Without healthier people to spread the risk, their premiums skyrocketed, a phenomenon known in the trade as the “adverse selection death spiral.”

The death spiral is clearly part of the long term plan as private insurers are run into the ground. This in turn will lead to a bailout or an outright nationalization on the grounds that the crisis in treating people must be averted. In regards to Obamacare, in theory they have the mandate which would put everyone in the boat and in turn lower costs, in reality the fine is so low and enforcement likely to be haphazard that it will make sense to simply dodge the law and accept whatever slap on the wrist the government gives you. As for New York, the affects were predictable as premiums quickly skyrocketed into almost unsustainable levels. Off course the next solution is some form of price controls, which Governor Patterson is trying to instate, but attempts to legislate away reality seldom work and often lead to...well I guess that might be unintended consequences.