The Rise and Fall of Hope and Change

The Rise and Fall of Hope and Change

Alexis de Toqueville

The American Republic will endure until the day Congress discovers that it can bribe the public with the public's money.
Alexis de Tocqueville

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The United States Capitol Building

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The Constitutional Convention

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The Continental Congress

George Washington at Valley Forge

George Washington at Valley Forge

Tuesday, November 9, 2010

How Obamacare Is Destroying Consumer Protections

From The CATO Institute:

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How ObamaCare Is Destroying Consumer Protections

Posted by Michael F. Cannon



In this morning’s Charlotte Observer, I explain how ObamaCare is destroying consumer protections. Exhibit A is Blue Cross Blue Shield of North Carolina’s decision to refund $156 million to its policyholders:



BCBSNC’s refunds show that ObamaCare is leaving seriously ill patients with less protection, not more. Health insurance was hardly perfect before ObamaCare, but BCBSNC’s policyholders had insurance that had pre-funded many of their future medical bills.



Now, ObamaCare has effectively transferred those reserves from the sick to the healthy. Seriously ill policyholders now have less protection against BCBSNC reneging on its commitments to them. Competition used to discourage skimping; ObamaCare rewards it.



Due to space considerations, the editors dropped the parts where I explain (A) how research by Harvard economist (and sometime Obama advisor) David Cutler shows that under ObamaCare’s price controls, insurers must compete to avoid the sick, and (B) that ObamaCare is blocking further innovations — such as those foreseen by University of Chicago economist John Cochrane — that would provide even greater protection to the sick.



Michael F. Cannon • October 6, 2010 @ 10:22 am

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