The more the evidence emerges, the more one has to wonder: Could Obamacare have been designed any more poorly? Even those who don’t mind Obamacare’s striking consolidation of power and money in Washington at the expense of Americans’ liberty, or who don’t mind the medical overhaul’s $2 trillion price-tag over its real first decade (2014 to 2023), must be starting to wonder at the sheer ineptitude of those who spearheaded its passage and penned its provisions.
Now comes a report from the Wall Street Journal, further confirming that President Obama’s signature legislation has essentially everything backward. We already knew that Obamacare’s fix for an American health care system that the federal government long ago broke, is to give the federal government far more power over American health care; that its solution to escalating health costs is to mandate greater health benefits (and, hence, higher costs); and that its solution to the pricey overreliance on pre-paid health plans — offered by insurance companies in lieu of real insurance — is to have the government require Americans to buy those pre-paid health plans under penalty of law.
Now, courtesy of the Journal, we learn that Obamacare’s mandated “essential benefits” (so “essential” that tens of millions of people freely forego them when the government doesn’t compel their purchase) really only apply to the small group and individual markets. In the realm of bigger businesses, the mandates won’t similarly apply.
The Journal writes:
“Many employers and benefits experts have understood the [Obamacare] rules to require robust insurance, covering a list of ‘essential’ benefits such as mental-health services and a high percentage of workers’ overall costs….
“But a close reading of the rules makes it clear that those mandates affect only plans sponsored by insurers that are sold to small businesses and individuals, federal officials confirm….Larger employers, generally with more than 50 workers, need cover only preventive services, without a lifetime or annual dollar-value limit.”
The Journal continues, “Administration officials confirmed in interviews that [these] skinny plans, in concept, would be sufficient to avoid” Obamacare’s penalties. Highlighting the Obama administration’s striking naïveté about government-imposed incentives, the Journal adds, “Several expressed surprise that employers would consider the approach.”
The result? In the individual and small-group markets, where many people now have no health insurance at all, it will be increasingly hard —if not outright illegal, once Secretary Kathleen Sebelius finishes issuing her largely unchecked decrees — to find the kinds of low-premium, high-deductible insurance plans that cost people less and give them more control over their own health-care dollars. In these markets, essentially the only plans allowable under federal law will be expensive ones that give insurance companies — who, it’s worth recalling, supported Obamacare — a piece of nearly every medical transaction.
Meanwhile, in the market involving larger employers, Obamacare will (A) largely exempt people from the costly mandates that it will inflict upon those in other markets, and (B) require that “preventive services” — like the abortion drug ella — be covered, while not requiring coverage of the kind of things that genuine health insurance would cover, like expensive hospital visits. In other words, it will lead to people having a sort of reverse insurance — coverage of most things that most people could easily pay for out of pocket, with no coverage for most things that most people rely on actual insurance to cover.
The Journal writes that offering these reverse insurance plans is “just one strategy companies are exploring.” It adds,
“Regulators worry that some of these strategies, if widely employed, could pose challenges to the new online health-insurance exchanges that are a centerpiece of the health law. Among employees offered low-benefit plans, sicker workers who need more coverage may be most likely to opt out of employer coverage and join the [Obamacare] exchanges. That could drive up costs in the [government] marketplaces.”
Thus, as with essentially all of Obamacare’s drafting errors or ill-conceived efforts at coercion, the “unexpectedly” high costs would be covered by John Q. Public in the form of higher taxes, which a beefed-up IRS would enthusiastically collect.
The solution? Repeal and then real reform.
Jeffrey H. Anderson is executive director of the newly formed 2017 Project, which is working to advance a conservative reform agenda.
The Weekly Standard
May 21, 2013
Yet Another Obamacare Design Flaw
Jeffrey H. Anderson