Megan McArdle proposes three reasons for the administration’s extension of the open enrollment period for the healthcare exchanges under the PPACA:
One is that the administration fears the system will crash under the kind of demand spike they saw in the last weeks of December enrollment. This is just a prophylactic measure designed to make sure that people who genuinely tried to sign up but couldn’t get through don’t get hit by the individual mandate — and show up on television, crying, shortly thereafter.
The second is that the administration knows, or strongly suspects, that most of the people who have so far bought insurance are people who already had insurance. They’re concerned that when enrollment is closed, they’re only going to be able to point to a net reduction of a few million uninsured — and that almost all the reduction will come from people on Medicaid. So they’re hoping to get a few hundred thousand or million more uninsured people to sign up during the grace period.
The third, most worrying, possibility is that the demographics haven’t really improved substantially. A lot of commentators, including me, have been expecting the “Young Invincibles” — the younger, healthier customers whose premiums will subsidize care for the previously uninsurable — to show up on the exchanges this month. So far, only 25 percent of total signups have come from young adults. And even that may overstate things, because it isn’t unreasonable to assume that the folks who selected plans but didn’t pay for them are young and irresponsible people like … well, like me at 25.
I’ll propose another. Either the administration doesn’t understand or doesn’t believe in insurance. You can’t run an insurance plan the way the administration seems to want to. There’s no way to project your costs which means there’s no way to determine premiums.