From James Taranto’s Best of the Web in The Wall Street Journal, The Young and the Clueless;

The trouble is that loss aversion also militates against buying insurance. Especially if you don’t make a lot of money–and many young people don’t–writing that premium check is painful if not prohibitive. Steven Binko, who lost his job at Olive Garden and is now unemployed, tells Bloomberg he couldn’t afford even $40 a month.

And ObamaCare makes insurance a bad deal for young adults in numerous ways. First, that (hypothetical) 80% payout is an aggregate figure. Price-fixing to keep premiums down for older policyholders necessarily raises costs for younger ones. Mandated coverage for routine expenses, such as Sandra Fluke’s pills, raises prices further.

Meanwhile, ObamaCare’s prohibition on the denial of coverage for “pre-existing conditions” both pushes up costs for healthy policyholders (who again are disproportionately young) and reduces the benefits of–or the need for–insurance.

HKO

The premise of this law is the height of economic ignorance.  The intention is to lower costs and broaden coverage.  Yet the price fixing will only lower costs for the older and more wealthy at the expense of the younger and less wealthy.  Mandated coverages raise costs, as does taxes on medical devices and other increases on the health care providers.

Higher costs do not always show up in the form of dollar price tags.  If limits are placed on selling price but increased costs are mandated then we will see either lower quality of car as the delivery is pushed from higher costs practitioners like MD to lower cost like nurses and medical assistants.  The flu shot you used to get from your doctor (who had your medical records and knew about your allergies to certain medications) is now available at Walgreens.

Service will also suffer. The squeeze will also affect availability and waiting periods.

This is not complicated it is all Economics 101.  Raising the price on those least able to afford the coverage will result more of the young electing against coverage. So not only does this misguided nightmare raise costs but it reduces he number of people covered.

Market oriented reforms such as encouraging individually controlled health savings accounts, and allowing insurers to cross state lines would go much further to reaching their stated objectives. Penalties should be reserved for those who allow coverage to lapse; guaranteed insurability is an obstacle to the risk pool but it can be addressed with proper incentives.

Our health problem could have been addressed in a number of ways other than a complete takeover of the whole health care economy. I has become another example of government seeking to provide a benefit without paying the cost.  It would have been much simpler to remove the numerous incentives that drive health care costs higher and simply provide insurance vouchers at taxpayer’s expense to those who needed it.

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