Monday, October 14, 2013

Obamacare Losers

First of all, if you've got health insurance, you like your doctor, you like your plan - you can keep your doctor, you can keep your plan. Nobody is talking about taking that away from you."
President Barack Obama

President Obama's statement has been shown to be untrue. I don't ascribe ill intention to the President or PPACA supporters. PPACA may prove broadly beneficial. But those who lose their current coverage and receive no government subsidies will be worse off. The counter to the claim that they're worse off is that their new plans will have increased level of (mandatory) benefits which are better for them and society. 

I am unconvinced by this argument. It's exactly like saying that instead of driving your $12,000 compact car with minimal upgrades and a low chance of being undamaged in an accident, you MUST purchase a fully loaded $60,000 large sedan, SUV, or pickup truck with a better chance of surviving a serious collision. So the government forces auto companies to stop making the $12,000 compact that you prefer. Though you have little financial capacity and less desire to drive something large which also has voice activated commands or rear view cameras, the choice isn't yours anymore.
At least 146,000 Michiganders — and possibly thousands more — with health coverage purchased directly from insurers now are learning their polices will end Dec. 31 because they don’t meet the minimum requirements of the federal health care act. Under the law, each policy must cover essential benefits in 10 categories. Instead of beefing up these policies, insurers are opting to drop them, advising consumers to consider other policies that are now available either from the insurers directly or though the Michigan Health Insurance Marketplace, also known as the state exchange. The policies that are ending were often less expensive on the individual market because they provided limited benefits and were sold to healthier consumers.
And that was fine with consumers such as Josh Mulder. Mulder had landed a plan several years ago that cost his Wixom family of four just $291 a month. That policy will end Dec. 31, according to a letter from his insurer. The policy didn’t cover things such as maternity care or prescription drugs, but, Mulder said, his family is generally healthy and he was willing to take the risk.“I had a great rate,” he said. Rates that meet the required benefits under health reform average $762.06 a month on the Michigan Health Insurance Marketplace for his family of four..

Purchasing health care is not like purchasing an automobile but the principle is the same. The government is mandating a specific choice. Maybe this is okay because the government already requires that vehicles have certain safety features and pass certain tests. You can't purchase a new car without seat belts or air bags.  

Often people who make this argument have trouble delineating any point where the federal government can't mandate or regulate. But let's take that objection seriously. It does have some validity. A government which wants to prevent vehicular carnage can surely attempt the same in health care no? I'd say no because drivers directly impact other people. The people detailed in this article are not those fierce individualists or (in some people's minds) lazy freeriders who haven't purchased insurance. They've already purchased insurance which fits their needs and budget. 

The government is making them purchase additional insurance which they don't need and may never use in order to subsidize other people's insurance choices. If I am a sixty something worker I may no longer need to cover my child until he's twenty-six. If I am a forty something man I have little use for insurance that mandates well woman visits or contraceptive coverage. If I am a thirty something fitness guru I may not desire extra coverage which allows multiple doctor visits. If I am a woman well past her reproductive years I may skip an insurance policy that includes maternity care. And so on.

Some might argue that such people are wicked selfish folks. Perhaps. But we are all self-interested. In a marketplace people are able to pursue their own self-interest. For some, the PPACA has reduced choice and raised costs. This is not a good thing.
A utilitarian may claim that it will all be worth it if the people with increased coverage and lower costs outnumber the people with the opposite. We lack that data. But if the PPACA's goal was to give coverage to those without, it may have been wiser to do a simple transfer payment. Raise taxes on everyone and give the money to those without insurance; cut taxes on those without insurance and allow them to use the money to purchase insurance, or open up Medicare/Medicaid to anyone without insurance, regardless of age or income.

Those decisions all have their own cost-benefit analyses. But they would have been more straightforward than reducing choices and raising costs for some with insurance in order to subsidize favored groups with insurance or give insurance to those without. I have no problem paying higher income taxes to get someone else insured. I have a major problem with being forced to buy coverage I don't want and lose coverage that I like. Can you afford to pay twice as much for insurance coverage as you do now? Because I couldn't. I think a law that results in that outcome needs editing. PPACA supporters may feel differently. That's fine. I simply ask that they at least acknowledge that the PPACA does harm some people. That data is in.

What are your thoughts?
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