By Dan Calabrese ——Bio and Archives--August 13, 2013
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Obamacare contains a blizzard of mandates and regulations that will make health insurance more costly. One of the most significant is its caps on out-of-pocket insurance costs, such as co-pays and deductibles. Section 2707(b) of the Public Health Service Act, as added by Obamacare, requires that “a group health plan and a health insurance issuer offering group or individual health insurance coverage may not establish lifetime limits on the dollar value of benefits for the any participant or beneficiary.” Annual limits on cost-sharing are specified by Section 1302(c) of the Affordable Care Act; in addition, starting in 2014, deductibles are limited to $2,000 per year for individual plans, and $4,000 per year for family plans.
The reason for the delay? “Federal officials said that many insurers and employers needed more time to comply because they used separate companies to help administer major medical coverage and drug benefits, with separate limits on out-of-pocket costs. In many cases, the companies have separate computer systems that cannot communicate with one another.” The best part in Pear’s story is when a “senior administration official” said that “we had to balance the interests of consumers with the concerns of health plan sponsors and carriers…They asked for more time to comply.” Exactly how is it in consumers’ interests to pay far more for health insurance than they do already? It’s not. Unless you have a serious, chronic condition, in which case you may benefit from the fact that law forces healthy people to subsidize your care. To progressives, this is the holy grail. But for economically rational individuals, it’s yet another reason to drop out of the insurance market altogether. For economically rational businesses, it’s a reason to self-insure, in order to get out from under these costly mandates.The huge, overarching problem with all of ObamaCare is that it tries to put a square peg in a round hole by mandating, by law, economic conditions that are impossible under economic reality. They try to mandate that people with pre-existing conditions can't be turned down for coverage, and can't be made to pay more, but in order to do that they have to force people who don't want or need insurance to buy it anyway. And when people resist or opt to just pay the fine - er, tax - instead, the whole notion of what it will cost starts to unravel. They try to force employers to cover people, only to find that employers change their hiring practices to avoid the extra costs, so then the government tries to change the rules that determine how total up your workforce. The mandate isn't workable, so it's delayed. The eligibility standards for subsidies aren't workable, so they're changed to the "honor system" or if you work for Congress, waived altogether. The cap on out-of-pocket expenses isn't workable, so it's delayed. The implementation funds aren't there, so Kathleen Sebelius travels the country trying to shake down companies in the health care industry. ObamaCare is a disaster because it's a classic case of politicians believing they can make something happen just by writing a law that says it must happen, without any notion of how rational actors in the real world will react to their decree. And the worst part is that I don't even think the unworkability of the law is that big a concern to them. It only gives them ammunition to argue for going to a government-run, single-payer system, which is what they've wanted all along. If the Republican-controlled House really votes funding for this turkey, in spite of everything that's happened, then it is worse than useless that said majority exists at all.
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Dan Calabrese’s column is distributed by HermanCain.com, which can be found at HermanCain
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