Will Defection Thwart ObamaCare?

ObamaCare is fresh in the headlines due to the impending government shutdown. In the early part of his article (here) James Taranto of the Wall Street Journal criticizes Ezra Klein's view on ObamaCare. ObamaCare presents an adverse selection problem for those who are at a lower risk of needing health insurance. Why should people pay such high premiums if they have a lower risk for incurring medical expenses? Pooled risk lowers the cost for people who need coverage the most, while placing the highest burdens on people who have a lower risk for needing health insurance. This redistributes costs to insure against the risk of needing health insurance. But the high risk of purchasing ObamaCare may not be worth the future reward.

The issue turns in to the prisoner's dilemma. If many people cooperate and pay the high rates now, they will reap the benefits of lower cost health care policy later when they need it. Yet Taranto argues that "the individual cost of defection will be minimal", and thus will be a likely choice. A 28 year old individual can choose to forego paying the high premiums now, but still receive coverage at the age of 53 with a pre-existing condition. But the free rider problem suggests that many people will naturally revert to this solution, and if enough people defect and refuse to cover the costs, then ObamaCare could cease to be a functional program. This risk of incurring the expenses now for a program that may not be successful later is too high. The optimal solution for the healthy, young, or rich individual would be to abstain from purchasing ObamaCare.