One problem that providers face is what economists call "adverse
selection." This means that workers who need more-expensive health
care because of existing conditions will want to choose more
comprehensive plans. This leads to higher costs for such plans,
making the premiums even more expensive.
Mr. Enthoven advocates "risk adjustment" to control for adverse selection. This is a type of statistical procedure that estimates the likely cost of subscribers based on age, location, sex and so on, allowing insurers to predict the cost of those who sign up. Premiums can then be adjusted to reflect actual costs related to different health risks associated with different populations.
And if a diabetic recovering cancer patient finds herself in a cohort with premiums so high that she can't afford insurance at all, it's just a testimonial to the efficiency of the marketplace. To those of us who thought that the purpose of health insurance was to pay the medical bills of the sick this is indeed a truly remarkable innovation...