This is from Megan McArdle at Bloomberg with a great analogy on the present delicacies inherent in ObamaCare's patchwork alliances:
In [a] classic game-theory case, you and a professional associate are both arrested for theft. If neither of you talks, then you’ll probably get off. But if just one of you talks, then the person who talks will get a reduced sentence, while the other person has the book thrown at them. If you both talk, then both of you go to jail for a long time. The equilibrium is for both of you to talk, just in case the other guy does . . . which is why criminal gangs go to such elaborate lengths to build up trust and dispense punishment for snitches.Insurers and Democrats are now in a similar situation. Legislators need insurers to help them make this law work by staying in the market and selling policies for affordable premiums. Insurers need legislators to hold this law together, particularly the individual mandate. If both of them hold strong, then Democrats have their best chance to get Obamacare working, and they can hope that voters like it so they can win re-election. Insurers, meanwhile, get a system in which the public is legally required to buy their product.But if you think the other side might waver, then your best move is to defect immediately. If insurers stand strong but politicians end up repealing the mandate, then they will have lost a bunch of money for nothing. If politicians stand strong but insurers raise prices and/or exit the market, they’ll get slaughtered at the polls.The moment that it looks like there’s a big risk that Obamacare won’t work, both Democrats and insurers are going to stampede for the exit. Yes, Obama can veto anything that threatens his favorite law. But if it gets that far, he’s already lost. His veto will cost his party big in the 2014 midterms, quite possibly enough to cost them the Senate. But by then it will probably be irrelevant, because if Obama has to veto something like a bipartisan bill to delay or repeal the individual mandate, his presidency will be over, and his signature legislation will be in grave danger. Insurers were willing to risk fairly substantial losses in 2014 to help the law get established and build market share. If it looks like the law is going to fail, they probably aren’t going to be willing to do it again in 2015.
