Why Rate Shock Might Matter

There has been a lengthy, multi-sided debate in the last week or so, with much ad hominem and gnashing of teeth, over whether California’s insurance premiums are going up because of Obamacare, and if so what that might mean for the law’s success or failure. Avik Roy of Forbes is responsible for starting it, but at this point just about everyone who writes on health policy has weighed in, and if you read the most recent round of posts — see Jonathan Cohn, Tyler Cowen, Matt Yglesias, Megan McArdle and Peter Suderman, for a representative sample — you’ll find that liberals are mostly acknowledging that premiums are going up for the young and healthy (and especially the crucial “bro” demographic) but arguing that this was always part of the health care reform plan, while their critics are mostly countering that 1) Obamacare supporters were not always so forthright about this cost-shifting and 2) that if “rate shock” is severe enough, the whole mandate-regulate-subsidize framework could quickly fall apart.

I’m with the liberals on this much: Any plausible health care reform, the various conservative alternatives to Obamacare included, would necessarily have losers as well as winners, and as far as potential losers go single young men with above-average incomes are not precisely the country’s most disadvantaged demographic. [...]