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Wyman, Barnes Brace for Health Insurance Exchange Rate Shock.

Malloy administration officials, lead by Lieutenant Governor Nancy Wyman and budget chief Benjamin Barnes, are chagrinned. The state’s new health insurance exchange, heading for a launch later this year as part of the Affordable Care Act, has set forth the requirements of policies to be sold in Connecticut. As is the state’s custom, the mandates exceed what the federal law requires. The rates accompanying the policies the insurance companies participating in the program are submitting to the state’s insurance regulators are far higher than anticipated when the program began taking shape. The number of features required in a policy, after all, is reflected in the cost. Look for the price tag to hover around the $4,000 a year mark.

Young men in their 20s and early 30s are essential to making the program work. As a class, they are healthy so will pay premiums and not make many claims. Prodding them to purchase insurance on the exchange rather than pay the government-imposed penalty (or tax, according to Chief Justice John Roberts) is one of the many early challenges of the government program. That will become more difficult to do as the public realizes the federal government is having some trouble figuring out how to enforce the penalty for not having insurance, the carrots and sticks lose some of their force.

The exchange faces further impediments to success if employers move employees from increasingly expensive private plans into the public exchanges.