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ObamaCare's Hidden Time Bomb - Forbes.com

Posted on by Brandon Klein

ObamaCare's Hidden Time Bomb

Avik Roy, 05.07.10, 06:00 AM EDT
A provision buried deep inside the health reform law may wreak havoc on private insurers.

One of the quirks of ObamaCare is that most of its key provisions don't go into effect until 2014. But in any 2,300-page law, there are bound to be provisions that have immediate and unintended consequences. One such provision is Section 2718, entitled "Bringing Down The Cost Of Health Care Coverage."

If only. Section 2718, at a mere 802 words, goes into effect first thing next year and will have a huge impact on the private insurance market. It is the section that converts private insurers into regulated utilities by effectively placing a ceiling on their already-low profit margins. Depending on how the law is implemented by Kathleen Sebelius, the Health and Human Services secretary, it could end up driving many insurers out of business.