May 23 2013
In the latest indication that ObamaCare harms more people than it helps, we must consider the plight of the low-skilled worker. Low-skilled workers will likely be much worse off under ObamaCare than they have ever been.
Michael Barone comments on a Wall Street Journal report that, as a result of ObamaCare, many insurance companies are pitching “skinny” or “low-benefit” health insurance plans to low-skill workers:
You might be wondering what a "skinny" or "low-benefit" insurance plan is. The terms may vary, but the basic idea is that policies would cover preventive care, a limited number of doctor visits and perhaps generic drugs.
They wouldn't cover things such as surgery, hospital stays or prenatal care. That sounds similar to an auto insurance policy that reimburses you when you change the oil but not when your car gets totaled.
If somebody gets really sick, such policies are meaningless. Such a policy also isn’t really insurance—insurance is supposed to cover big emergencies. Indeed, Barone writes:
The problem here is that Obamacare's architects seem to misunderstand the concept of insurance.
People buy insurance to pay for low-probability, high-cost and undesirable events. It doesn't make sense to hold onto enough cash to replace your house if it burns when you can buy an insurance policy that will cover that unlikely disaster.
But Health and Human Services Secretary Kathleen Sebelius has a different idea of what insurance is.
In response to an American Society of Actuaries report that health insurance premiums would rise 32 percent under Obamacare, she said, "Some of these folks have very high catastrophic plans that don't pay for anything unless you get hit by a bus."
Her idea apparently is that insurance should pay for just about every health care procedure.
But the skinny policies that are being promoted because of ObamaCare will do nothing in the instance of a serious sickness--cancer, say. Preventative care, moreover, may be a mighty nice thing, but it's not very helpful if somebody gets drunk and decides to plow into the side of your car.
How did this happen?
The new health law only required insurance plans that covered mandated services for employees who worked in business with 50 or more employees. A former Obama official is quoted saying that it was assumed that business would offer top-notch insurance policies to attract proficient workers.
But when it comes to unskilled labor the employer is only looking for people with—well—low skills. Particularly in a bad economy, employers don’t need to offer high-quality health insurance to attract such workers. The fines for not providing insurance to such workers are low enough to make this alternative attractive.
But here is the takeaway for this humanitarian disaster:
Oops. It turns out that Friedrich Hayek may have been right when he wrote that central planners would never have enough information to micromanage the economy.
I have another takeaway: ObamaCare was billed as something that would help people. It doesn’t. In fact, the only thing it achieves is the expansion of government.