1) In the 1970s, wheeled luggage was introduced but clumsy and awkward. In 1989, a pilot developed the roll-aboard suitcase which led passengers to seldom use airport luggage carts, an unintended consequence. 2) The Affordable Care Act was intended to lower insurance premiums but led to the opposite - premiums rose by 9% the first year. Several provisions increased premiums more than anticipated, an unintended consequence. 3) Many state insurance co-ops formed to increase competition under the ACA ceased operations, which will increase the federal deficit more than intended and reduce availability of insurers, demonstrating unintended long term consequences of decisions.

1. Unintended Consequences
By Russ Jones
In the 1970s wheeled luggage arrived on the scene. It was clumsy, unbalanced and usually was
pulled by a strap that resembled a leash and, when used, gave the appearance of a person walking
a dog. In 1989, Northwest Airlines pilot, Bob Plath developed the roll-aboard suitcase for flight
crews. His development led to the fact that passengers today seldom use airport rental luggage
carts. You will have difficulty finding a wheeled luggage cart at American airports and when
you do, the company providing them is probably being subsidized by the airport. This is an
example of an unintended consequence.
An unintended consequence is an outcome that was not the one intended by a purposeful action.
The concept has long existed, but was named and popularized in the 20th
century by sociologist
Robert K. Merton.
Unintended consequences can be categorized into 3 groups:
1) A positive, unexpected benefit.
2) A negative unexpected detriment occurring in addition to the desired effect of the action.
3) A perverse effect contrary to what was originally intended. In other words, actually
makes the existing problem worse than it was.
With the anniversary of the Patient Protection and Affordable Care Act (affectionately referred
to by friends, enemies and family as Obamacare), the power of unintended consequences once
again raises its head.
When marketed to the public, it was promised that by 2016 insurance premiums for families
would be $2500 per year less than they would without healthcare reform. What we heard was
that our premiums would go down by $2500. What we got instead was an opposite and
hopefully, unintended consequence. After the first year of legislation, according to the Kaiser
Foundation, families’ health insurance premiums rose by 9%. The non-partisan Congressional
Budget Office (CBO) is predicting that some of the provisions could increase premiums even
more. Presumably, these premium hikes were a direct reaction by insurance companies to the
anticipated cost burden, whether real or imagined, of the Act’s many provisions.
One of the Act’s provisions that went into effect in 2010 required the federal and state
governments to implement a process to evaluate insurance premiums with greater than 10% rate
hikes. As early as April 16, 2012, several insurers were cited for unreasonable rate hikes. One
insurer had raised premiums by as much as 22%. However, not all states are able to reject the
rate increases and demand funds be reimbursed to consumers. Often, the punishment for
excessive increases amounts to a mandate to put a warning on their websites that their rate hikes
were deemed unreasonable and explain why they will not be rescinding them. Reading a
warning that your insurance company knows they are charging you too much but will do so
anyway leaves consumers with only two choices: accept the abuse, or roll the dice with another
insurer. In these situations the legislation offers transparency but little real protection. It’s as
though a nearby police officer is shouting “Hey you’re being mugged!” but not apprehending the
perpetrator.
In spite of the rate hikes, about two of every three healthcare payers lost money in 2014. As a
result, many of the state insurance co-ops, formed to create greater competition among insurers,
ceased their operations in the co-ops. Others insurers will probably follow. Should the trends

2. continue, the federal deficit between 2016 and 2025 would be increased by $120 billion instead
of reducing the debt by the promised $137 billion; a one quarter trillion dollar reversal of
fortune.
While the Affordable Care Act was to make available reasonably priced healthcare insurance
with a wide network of physicians, hospitals and health networks, it is a law now known for
skyrocketing premiums, narrowing networks of coverage, perplexed consumers and insolvent
insurers.
The lesson for all of us is to carefully assess both the short and long term ramifications of any
and all of our decisions. Though the future can never be predicted with 100% accuracy, we can
still fight the seduction of immediate gratification by taking into careful consideration the long
range repercussions of our choices. Rose colored glasses might make the near term look pretty
but they should not keep us from vigilantly watching and anticipating what’s speeding around
the bend.
RUSS JONES IS A PARTNER AT FIRST TRANSITIONS, INC., A CORPORATE-SPONSORED CAREER TRANSITION AND
EXECUTIVE COACHING FIRM SPECIALIZING IN THE HEALTHCARE FIELD. HE CAN BE REACHED AT 630/571-
3311, 312/541-0294 OR AT RJONES@FIRSTTRANSITIONS.COM. YOU CAN ALSO VISIT THE WEBSITE AT
WWW.FIRSTTRANSITIONS.COM.