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Trump's Obamacare order could destroy the health-care system

Catherine Rampell on

The bigger problem is called adverse selection.

That's the idea that healthy people will sort into low-cost, bare-bones plans, while relatively costly people will stay in the more generous, Obamacare-compliant plans, which can't legally turn customers away. Premiums in Obamacare plans would then spike, driving out more relatively healthy people, further driving up premiums, and so on.

In the end, the whole individual market falls apart, leaving us with basically the pre-Obamacare system. Even those healthy people -- even if they stay healthy! -- have no real options.

The only good news is that Trump's executive order doesn't have force of law. It's a set of instructions for Cabinet members to come up with further regulations. These may turn out to be weaker than Trump has implied, especially because some elements of the order appear legally dubious. They also won't be ready in time for the upcoming 2018 open enrollment season.

In the meantime, though, Trump's executive order will spook a lot of insurers, which have only just recently found their footing in the existing system. And it's also likely to confuse consumers, which could depress enrollment and destabilize markets further.

Which would be pretty much on brand for this nihilistic president: When you can't come up with a new system that works, just blow up the old one.

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Catherine Rampell's email address is crampell@washpost.com. Follow her on Twitter, @crampell.

(c) 2017, Washington Post Writers Group

 

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