Henry Aaron: It's Good That Insurers Are Canceling Their Lousiest Health Insurance Plans: Noted
Henry Aaron:
Rather than apologizing for these cancelations, [the administration] should be bragging about them.... Imagine a new law enacted to promote food purity. As it is being debated, you are told ‘if you like what you eat, you can keep on eating it.’ The new law takes effect, and one day you find that the market no longer carries certain foods you have been buying... [which] included elements found to be bad for your health. The pure food act barred their use.
Obamacare is analogous.... It bars certain common practices of insurance companies that most people find unacceptable at best, outrageous at worst... [as] of January 1, 2014.... Currently available insurance plans that include such practices will not be allowed on the market.
Let’s be clear. Not all plans have these noxious provisions, but some do. And let’s also avoid demonizing the insurance executives who sold policies with these provisions. Many people look hard for the lowest premium and pay less attention to coverage in circumstances they see as unlikely, so there has been a market opportunity for insurers to lure customers willing to accept substandard coverage at rock-bottom premiums, and canny insurance executives have tried to seize it....
The major problem has... [been] lousy incentives that drove normal human beings to engage in socially deplorable practices. Obamacare is changing the system.... Are those denied access to ‘adulterated’ insurance going to have to pay more than they did in the past? The answer in most cases is ‘no’....
People should be no more shocked when substandard insurance plans are removed from the market than they would be if food purity legislation caused some products to be removed from a grocer’s shelf.... bamacare is removing insurance products from the market that are bad for your health.
