Obama will be his health insurer’s very favorite enrollee

December 23, 2013

President Obama probably isn't thinking here about whether to choose bronze or silver coverage. But maybe he is! (Carolyn Kaster/AP)

President Obama has enrolled in an insurance plan through the District of Columbia's exchange. His enrollment is largely symbolic, as the president will continue to receive his care from the military, according to a statement from a White House official. And this turns out to be great for whichever health plan he picked. President Obama, as Jeff Young points out, from insurers' point of view, is pretty much the prefect enrollee.

This has nothing to do with the prestige of having the president choose your insurance plan; the White House has been mum on that point, so we don't know who netted his sign-up. It has everything to do with the actuarial underpinnings of insurance, where the best consumers are the ones who don't buy much, or any health care -- but do pay in premiums. These type of patients are an insurance plan's dream since they pay for a product they will never, or rarely use. That, then, lets insurers' use their premium dollars to cover the really high claims of very sick patients.

The only way that the president could have done better for the insurer he selected would be by signing up for a gold or platinum plan, which tend to charge higher premiums for more robust insurance coverage. Alas, Obama opted into a bronze level plan, which has skimpier benefits. Still, he's a consumer who will be paying something for nothing -- not a bad deal at all in the eyes of the insurer.

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