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Tuesday, September 21, 2010

Obamacare Forces Major Insurers To Stop Offering New Child-Only Plans

Those of us that warned what happen when you force companies to either lose money or make money, are not surprised.

Those that did not see this coming, had their heads up their asses.


Some of the country's most prominent health insurance companies have decided to stop offering new child-only plans, rather than comply with rules in the new health-care law that will require such plans to start accepting children with preexisting medical conditions after Sept. 23.

Fact: Businesses are in business to make money. PERIOD.

Fact: If you interfere and create a bunch of laws to stop them from turning a profit, they will stop offering their product if it will lose them money. PERIOD.

Others have the made the points I wanted to, so lets start there.

Patterico's Pontifications:

Well. Unintended, by the chuckleheads who wrote the law? Sure. Unexpected by those of us who warned against such a law? No.

[S]upporters of the new health-care law complain that the change amounts to an end run around one of the most prized consumer protections.

“We’re just days away from a new era when insurance companies must stop denying coverage to kids just because they are sick, and now some of the biggest changed their minds,” Ethan Rome, executive director of Health Care for America Now, an advocacy group, said in a statement. “[It] is immoral, and to blame their appalling behavior on the new law is patently dishonest.”

No, Ethan, what is patently dishonest — or simply stupid, if there must be an alternative — is to ignore the fact that the new law caused this. They were told they couldn’t raise rates. What did you expect them to do? Lose money to comply with your sense of right and wrong?

Remedial economics all around!

It would be laughable if it didn’t exact an actual human toll.

More from Ed Morrissey at Hot Air:

This should be Econ 101, or at the least Insurance 101. However, it’s the problem that ObamaCare advocates not only refused to fix, they refuse to acknowledge. No one will buy a $3000 plan for comprehensive insurance for a child who is healthy, not unless it comes as part of an insurance plan for the whole family. They might buy a catastrophic insurance plan for a few hundred dollars for use just in case the child gets sick, but that kind of plan won’t exist any longer under ObamaCare. Now that the mandates for coverage exist for pre-existing conditions, parents no longer need to bother with that, anyway, as they are now in a no-risk position. They can just wait to see if their child gets sick enough to need insurance, and then buy it.

The real truth is that hardly anyone under 40 needs the kind of insurance policy mandated by ObamaCare. They would be much better advised to buy catastrophic insurance and pay for their minimal use of the medical system through HSAs. Most younger people take one visit to a clinic each year, which would cost arounbd $150, for a physical, a far cry from the thousands they will have to pay for ObamaCare exchange policies. They are being used to subsidize older members of the risk pool in order to keep insurers from going bankrupt under the weight of ObamaCare mandates for coverage.

No one should be shocked at this decision. When government intervenes in markets for social engineering and political outcomes, the outcomes are always skewed and irrational. This time, it’s the children that will pay.

You cannot require companies run at a loss, otherwise a couple years down the line those very same companies will need..... BAILOUTS!!!

The more government interferes in the name of "making things better", the worse things get.

Anyone that claims they are surprised at these turn of events are either stupid or outright liars.

Repeal and replace.