One of the advantages of having a grandfathered health insurance plan is that you can look around and kick the tires of the new health insurance market place. A common fallacy I have heard from folks looking at going without health insurance is that they could go get a health insurance plan anytime they needed one. That is incorrect for most states. Most states allow health insurance to be sold without restriction only during the “open enrollment” period which recently went from October 1st to March 31st. The only state that mandates year-around sales of health plans is Nevada. The argument against year-around sales is the impact of adverse selection. The interesting question is how does this reduce adverse selection and health care costs?
Let us look at an example. Suppose in August your wife gets a call from the hospital and they say there is a dot on the mammogram and they recommend a biopsy. The earliest they can schedule the operation is in September. Is the insurance company better off if their prospective new customer delays their operation to October? In the immortal words of Hillary Clinton, what does it matter? How are they avoiding adverse selection by delaying treatment to October? For better or for worse the Affordable Care Act has made adverse selection a moot point for insurance companies. For those who are curious my wife’s diagnosis was just another false positive. Hmm Maybe I need to write my state representative and see if he wants to piss off his party some more.