1. Suppose in a given states new insurance marketplace, with community rating and no restrictions on who can buy at the community rate, the risk pool (distribution of expected health costs) is as follows:

30% of eligible enrollees expected health costs = $1,000 (per year)

65% of eligible enrollees expected health costs = $2,000

5% of eligible enrollees expected health costs = $10,000

Now suppose one insurer, and one insurer only, were allowed to offer any premium it wanted to any potential buyer and to exclude those it did not want to cover? What premium would they likely charge and who would the sell to and who would they exclude? What would happen to the other insurers? Does this help you see why the ACA was written to apply to all insurers?