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Sunday, November 17, 2013

Medical Insurance cancellations-A feature not a bug of Obamacare

Those who believe it is a feature argue something like the following:

Part of the funding for Obamacare was supposed to come from forcing young,healthy people to purchase more expensive insurance so that older,less healthy folks could have their insurance subsidized. This was an essential part of the redistribution of the law thought necessary for the economic viability of the insurance exchanges. It was thought to be politically expedient to claim that no one would loose their insurance and no one would loose their doctor so  the plan could be sold to the public.With the outcry from many of those who in fact did loose their plans, it became politically expedient to postpone or pretend to postpone those cancellations for at least some of those people until the next Congressional election,whether the President has the legal authority to do so or not .

Those who believe it to be a bug and therefore fixable argue the following;

Well, I guess no one actually believes that but the House of Representative has passed a bill with the apparent assumption being that it is a bug and we can fix the problem by not allowing insurance companies to cancel policies  because those polices do not meet the law requirements .But if the cancellations are a feature and necessary for the success of the insurance exchanges, the administration cannot allow that bill to become law and the President has threatened to veto .I wonder if any of the representatives who voted for the abolition of the  cancellations or the Senators who are proposing something similar think they are fixing a bug or realize the entire economic survival or the bill is at stake or do they just think that is politically expedient.

"The curious task of economics..."


Clark Venable said...

Interesting post from Wendell Potter that argues that insurance companies are just using Obamacare as an excuse to cancel and move people to more profitable policies. Just another way to look at it: http://wendellpotter.com/2013/11/sorting-out-why-insurers-cancel-policies/

phil said...

I believe the take-home of Potter's article is that the insurance companies didn't need the ACA for an excuse for years of cancelling policies to move to more profitable policies. And, note Potter's last line: "Chances are, they’ll be able to get much better coverage at a better price. Thanks to the Affordable Care Act."