In the guise of a news story, the New York Times presents a screed against what it calls “junk insurance.” The occasion for the screed is Senator Ted Cruz’s proposal that insurers be allowed to sell plans that that don’t meet Obamacare standards, if they also sell policies that meet these standards. The idea is to give consumers choices.
The Times’ Reed Abelson complains that under this proposal, insurance companies will sell “bare bones” policies, as they have done in the past. These policies may strike the Times as “junk insurance,” but for some consumers they are precisely the insurance they desire.
Years ago, I heard an “off-duty” insurance salesman say that people should only buy insurance to cover risks they cannot bear financially. In other words, buy auto and homeowners insurance, but don’t insure your television or computer.
In the health insurance context, this philosophy militates, for many, in favor of buying insurance that protects against health catastrophes, but doesn’t cover, say, routine visits to the doctor. In other words, insurance with a very high deductible.
I wrote here about my attempt to purchase such insurance for my wife to cover a hole in her French insurance policy. Pre-Obamacare, is was able to do so. Post-Obamcare, I’m not.
To President Obama and the New York Times the insurance we sought is “junk.” To us, it is the insurance we need to buy.
Obamacare doesn’t just bar insurance companies from selling catastrophic plans. It bars them from selling my wife insurance that doesn’t cover childbearing, even though she’s more than 60 years old. It bars them from selling insurance that doesn’t cover substance abuse treatment, even though she’s never abused drugs. And so forth.
The New York Times article glosses over this this matter, focusing instead on a few cases where consumers purchased insurance that didn’t live up to their expectations. In the most extreme case, a man bought a policy that limited payments toward chemotherapy to $1,000 a day, just a small fraction of what that treatment ended up costing him. As result, he was left with nearly $500,000 in unpaid medical bills. The man claimed his insurance agent assured him that the coverage for cancer was adequate.
Should Americans be barred from buying insurance policies they want because other Americans don’t take the time to figure out what their policies say? I don’t think so.
In any event, there’s a middle ground between not permitting the sale of health insurance that doesn’t meet Obamacare ridiculous (for many people) standards and permitting the sale of any conceivable policy. One could regulate against a policy that is grossly inadequate when it comes to treating cancer without requiring policies that cover childbearing costs for 60 year-old women. The Times makes it sound like the only options are Obamacare or scam insurance.
In reality, extreme cases like the ones the Times describes aren’t aren’t the reason the left wants to make people pay for insurance features they don’t need. Scam insurance is not the concern. The real reason is that paying for these features provides the funds used to subsidize insurance for people who aren’t poor but aren’t well off either (the poor are covered by Medicaid and were pre-Obamacare).
That’s the essence of Obamacare: get random people to pay for more health insurance than they need in order to subsidize health insurance for other people. Any Obamacare legislation that doesn’t overturn this regime should not be considered true repeal.