Insurers, however, seem warm to the idea. Wellmark, a large Blues plan, has publicly endorsed such a lockout period.
The Affordable Care Act, of course, tried to nudge uninsured people into the insurance market by charging them a tax penalty if they remained uninsured. But that policy, known as the individual mandate, is loathed by Republicans — and by a segment of the public — and would be eliminated under the Republican bill. The lockout provision in the new bill is an effort to replace it with another form of encouragement.
Some Democratic activists have called the idea punitive to patients with serious illnesses. If you have cancer, they argue, six months of waiting means six months when your disease is not being treated. But the idea is actually fairly similar to one that exists as part of Obamacare.
Under current law, if you let your insurance coverage lapse, you must wait until the next year before you can sign up again. The thinking is that if people could sign up for coverage at any time, they might just wait until they were in an ambulance to call the insurance company. Experts across the political spectrum worry that a world where people can buy insurance whenever they want is a recipe for a so-called death spiral, in which the insurance pool becomes sicker and sicker, and prices rise to unsustainable levels.
Would a six-month lockout prevent this? Maybe a little. Gail Wilensky, a senior fellow at Project HOPE, and a former Bush administration official, who thought the lockout might help, notes that Medicare has some strong penalties for people who sign up late.
But people entering Medicare have plenty of warning, and tend to know they will stay in the program, and eventually get sick. In contrast, most people in the individual insurance market cycle in and out quickly. They may not know all the rules, or even worry about getting coverage, since many assume they’ll be back in an employer plan soon.
“There’s a ton of people churning through,” said John Graves, an assistant professor of health policy at Vanderbilt.
He has studied the young, healthy uninsured population, and found that it is composed largely of people with short gaps in coverage between jobs. He worried that making sign-ups harder for such people, who already tend to eschew insurance, might discourage them from ever enrolling.
“You’re just kind of putting up these obstacles to all these people who are really the types of people that an insurance company wants,” he said. Mr. Graves said that such a penalty might act as a stronger incentive to people with known health problems, who would be careful to keep their paperwork in order and avoid any lapse in coverage.
We’ll find out very soon whether the economists at the Congressional Budget Office agree. Their assessment of the bill — and probably this new provision — is expected very soon.
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