Gasoline Lines and Cancelled Health Insurance Policies
The wave of health insurance policy cancellations reminds me of the gas lines in 1979. Once a week I took a gas break instead of a lunch break so I could fill up my car with gas. Lines were shorter in the middle of the day than in the morning or evening.
Then Ronald Reagan was elected president. He took away President Carter's price and regional allocation controls on gasoline, and the lines vanished overnight.
That's what we need to do with health insurance-take off the federal controls on health insurance. Tell the insurance companies they can issue any policies they like for the foreseeable future, subject to state regulation, and then people will get their policies back.
Even then, it will take companies a few months to configure new insurance policies and go through the state regulatory process of having them approved. Some states might be able to help by speeding up the approvals.
Bills currently moving through Congress would allow insurance companies to issue 2013 policies through 2014 as a temporary remedy to the cancellations. This is insufficient, and just delays the problem for a year. If you want to keep your plan, you should be able to keep it past 2014.
As everyone knows by now, the health insurance policies that are getting cancelled cannot legally be issued under the Affordable Care Act. Just as in the 1970s, when it was illegal to sell gasoline for more than the federally-mandated maximum per gallon, now it is illegal to sell certain health insurance policies.
The error-prone Web site is just the beginning of the problem. Americans will not be able to get the policies they want until insurance companies are allowed to sell them.
The Affordable Care Act mandates a one-size-fits all plan for health insurance, with required free routine care, mandatory mental health, maternity, abortion, and drug abuse coverage, and unlimited lifetime care. Plus, since people can pay a tax to opt out, and only sign up when they become sick, health insurance becomes very expensive.
That is why even if you liked your plan, you cannot keep it now if it does not meet the criteria laid out in the law. President Obama knew it, as did anyone who knew anything about the law.
On page 34,553 of the June 17, 2010 Federal Register, the Administration's mid-range estimate was that 51 percent of employer plans would lose their grandfathered status by 2013. Since 156 million Americans received coverage through employers in 2013, that is 80 million people. The high-end estimate was 69 percent, or 108 million people.
On the same Federal Register page, the Administration estimated that at least 40 to 67 percent of people with individual plans, those not covered by employer-provided health insurance, would lose their plans in 2013. Since 25 million people have individual plans, this adds up to an average of 13 million people.
In total, back in June 2010, the Administration estimated that an average of 93 million people would lose their health plans in 2013.
The real story is that the Administration estimated that nearly 100 million Americans would lose their health insurance, and yet the president feigns surprise today.
There is no end in sight to health insurance problems until the Administration lifts the restrictions and allows insurance companies to issue a variety of plans from which people can choose, subject to state approval.
The economy provides a wide range of insurance products, such as home insurance, auto insurance, life insurance, renters' insurance, without direction from the Federal government. Americans buy these policies without federal mandates because they want them. Health insurance should be the same way.
Life insurance and renters' insurance are not required. Many Americans go beyond the minimum auto insurance required by states, and over the thresholds of home insurance required by their mortgage companies, because these policies have value.
Those who cannot afford health insurance should be offered refundable tax credits to purchase it themselves, so they can have the same choice of doctors and services as other Americans. This has precedent. People who cannot afford food get food stamps, and people who cannot afford housing get housing vouchers.
The food stamp program has been subject to abuse, but no one is proposing to replace the food debit cards with one-size-fits-all bags of groceries delivered to people's doors.
People should decide what type of coverage meets their needs, not be told what they must purchase by the federal government.
If some people want their children to be on their insurance plan until age 26, they should be able to purchase plans that cover their children. Others who do not have children, or who do not want their children on their plans, should not have to pay the costs. Those who want maternity coverage should be able to buy a plan with maternity coverage. Those who do not want it should not have to buy it.
Within the confines of the Affordable Care Act, the simplest step would be to allow all plans approved by states to be listed on the health care exchanges. Then, when the Web site is fixed, people can go and buy them.
Insurance companies should be allowed to sell plans nationally, so that people can see specialists outside their communities.
States should take over the cost of those 2 million to 4 million people a year with uninsurable conditions-about 1 percent of the US population. Such individuals would receive health insurance, subsidized by the state, through regular insurance companies.
Back in the 1970s, the gas lines showed us that something was terribly wrong with government energy policy. Now, the health insurance policy cancellations show us that something is terribly wrong with the Affordable Care Act. The solution is the same: lift the restrictions and let insurance companies sell health insurance. Americans could have their health insurance back as soon as companies can get new policies approved.