Destroying Health Insurance

Throughout the debate over health care reform last winter and spring numerous critics argued that the package being voted on by the House and Senate was going to make health care more scarce and less affordable. Nancy Pelosi did little to reassure us that Congress knew what it was doing when she announced that we had to pass the bill so that we could find out what was in it (and liberals mock Christine O'Donnell for being empty-headed?).

Well, now the bill has passed and we're starting to learn what's in it, and what's in it is going to make a lot of people very unhappy. National Review focuses on just one item: child-only policies. These are policies written specifically to cover children, and they're relatively inexpensive because the policy doesn't have to cover items, like colonoscopies, prostate exams, mastectomies, etc., that children would never be expected to need.

It turns out that one of the many unintended consequences of Obamacare is that insurance companies are going to have to stop offering these policies. National Review's editors explain why:

Health-insurance giants Anthem Blue Cross and Blue Shield, Aetna, Cigna, CoventryOne, Humana, and UnitedHealthCare have stopped writing child-only policies in those jurisdictions where they are able to do so. The reason for this is obvious: Because Obamacare forces insurance companies to accept children who are already sick with pre-existing conditions on the same terms as healthy children, parents now have a strong incentive to wait until their children are sick to buy child-only policies, making the products a guaranteed money-loser for insurers, which are not in the business of guaranteeing losses to their investors and employees.

Those losses would be passed on to health-care consumers in the form of higher premiums and reduced benefits, meaning that the mandate to cover those with pre-existing conditions will function as a tax on other insurance consumers, and those who were responsible enough to buy insurance before they got sick will be punished to bail out those who were not similarly responsible.

The requirement to accept patients with pre-existing conditions essentially guarantees that a lot of people simply won't be buying insurance until they need the coverage. The insurers will have much less money coming in and much more money going out. There's no way a company can survive such mandates, which may actually be President Obama's plan. One way to achieve his goal of having a single-payer system where the government is the single-payer is to drive insurance companies out of business, and one way to do that is to make their coverage so expensive that fewer and fewer Americans can afford it.

If that's not his deliberate plan it is nevertheless what his plan may well achieve.