Must-Read: Henry Aaron: How to Rescue Obamacare as Insurers Drop Out

Must-Read: Henry Aaron: How to Rescue Obamacare as Insurers Drop Out:

There is a good fix for much of this problem…

From the day it opened its doors, the D.C. Health Exchange has required that all individual insurance policies be purchased through the D.C. exchange…. Once enrolled, customers’ applications go directly to the private company of their choice, where service is the same as it would have been had they applied directly to the insurer. Because the D.C. individual market is one big marketplace, there is no “inside” and “outside” the exchanges, with profit in one area and loss in the other…. If the federal exchange and all of the other state exchanges were to adopt the “one big marketplace” rule, the risk that insurers such as Aetna and UnitedHealth would selectively abandon customers in Obamacare exchanges would evaporate. Merging the relatively healthy individuals who now buy coverage outside the exchanges with those using Obamacare would help stabilize insurance for the whole group.

Predictably, insurers might balk at facing intensified competition they’re unaccustomed to. Some would incorrectly allege that customer choice had been limited. But in truth, customers would have expanded choice and improved service, because the exchanges can provide them unbiased information about coverage, costs and networks under all insurance plans. Creating one unified market would not solve every problem that insurers now confront. They would still have to learn how to manage risk in a world where they cannot charge absurdly high premiums or deny insurance to anyone. But establishing one big marketplace in each and every Obamacare exchange is low-hanging fruit, waiting to be plucked.