Obamacare: Unintended, But Predictable Consequences

From The Liberty Papers:

July 27, 2010


Oh Noz! Unintended Consequences!

by Brad Warbiany

A few months ago, when Pelosi crowed about the immediate effects of Obamacare, I pointed out a long list of them and my responses. My thoughts:



6. NO DISCRIMINATON AGAINST CHILDREN WITH PRE-EXISTING CONDITIONS—Prohibits health plans from denying coverage to children with pre-existing conditions. Effective 6 months after enactment. (Beginning in 2014, this prohibition would apply to all persons.)



Again, an increase to private health insurance premiums. But hey, who’ll complain? After all, it’s for the children.



Today, it looks like one is becoming even worse than I’d thought:



In Florida, Blue Cross and Blue Shield, Aetna, and Golden Rule — a subsidiary of UnitedHealthcare — notified the insurance commissioner that they will stop issuing individual policies for children, said Jack McDermott, a spokesman for McCarty.



The major types of coverage for children — employer plans and government programs — are not be affected by the disruption. But a subset of policies — those that cover children as individuals — may run into problems. Even so, insurers are not canceling children’s coverage already issued, but refusing to write new policies.



The administration reacted sharply to the pullback. “We’re disappointed that a small number of insurance companies are taking this unwarranted and unnecessary step,” said Jessica Santillo, a spokeswoman for the Health and Human Services department.



Starting later this year, the health care overhaul law requires insurers to accept children regardless of medical problems — a major early benefit of the complex legislation. Insurers are worried that parents will wait until kids get sick to sign them up, saddling the companies with unpredictable costs.



Blue Cross and Blue Shield of Florida issues about 9,000 to 10,000 new policies a year that only cover children. Vice president Randy Kammer said the company’s experts calculated that guaranteeing coverage for children could raise premiums for other individual policy holders by as much as 20 percent.



“We believe that the majority of people who would buy this policy were going to use it immediately, probably for high cost claims,” said Kammer. “Guaranteed issue means you could technically buy it on the way to the hospital.”



Of course, I’m being generous here in my suggestion than muscling private insurers out of providing coverage is truly an “unintended” consequence.



H/T: Jason Pye @ UL