“The biggest problem with the exchanges reflects a basic insurance rule: Insurers need healthy, premium-paying customers to balance claims they cover from the sick. Insurers have struggled in many markets because people who couldn’t get coverage previously due to a condition were among the first to sign up when the exchanges opened a few years ago. Healthy customers have been slower to enroll.”
And therein lies a major problem. I’m hardly the only healthy guy fully aware that less healthy people can’t be charged a higher premium, so essentially, I’m getting screwed over for being healthy (doesn’t that seem to be the way things work nowadays for those of us with personal responsibility?). Take away the individual mandate and these insurance companies would be really screwed.
And of course, like any system that rewards the bad and punishes the good, more and more people are going to let their health drop because there’s no incentive (other than perhaps their own pride and desire to live long) to stay healthy and no punishment (financially anyway) of being in poor health. Such a cycle can only end one way.
The last couple of years around 75% of the people signing up on exchanges were below the 250% FPL and eligible for additional cost sharing subsidies. People between 250 - 400% FPL haven’t been signing up in any big numbers. There maybe a few more signing up this year, but I doubt it will be enough to stabilize the exchanges.