A Question of "Access" - Follow up on Adverse Selection

In a previous post on June 18th, I discussed the issue of "adverse selection" and how it could potentially lead to a collapse in insurance markets. It turns out that there has already been evidence of this occurring in Massachusetts. According to a report from the Massachusetts Division of Insurance, "the number of people who appear to be gaming the state's health insurance system by purchasing coverage only when they are sick quadrupled from 2006 to 2008." http://bit.ly/bin9mN

What is interesting is that the penalties for choosing not to purchase health insurance in Massachusetts are stiffer than those outlined in the national health reform bill. With relatively weak penalties and little ability to enforce the mandates in the national health reform bill, I would expect that we would see an even greater percentage of people "gaming" the system than we see in Massachusetts if the bill is implemented in its current state.

This really becomes both an access and cost concern as it will either make it more expensive for people to purchase insurance and/or drive insurance companies out of the market depending on how the government responds to people "gaming" the system.