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Health insurance costs keep rising as healthier customers exit the marketplace. A decades-old collapse pattern is repeating in real time
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More than a million Americans have dropped health insurance since Congress let enhanced premium subsidies expire at the end of last year. Most were young and healthy.
Coverage costs more now that the healthiest customers have left. Insurers raised premiums to keep up, and those higher premiums pushed out the next healthiest slice of enrollees, worsening the pool again. The process, as economists David M. Cutler and Richard J. Zeckhauser documented in a 1998 research paper for Harvard University, continues until a generous plan "empties completely" and no amount of premium increase can sustain it.
