About those ‘substandard’ health insurance plans

As President Obama backed away from one of Obamacare’s more onerous — and legally binding — provisions and proclaimed that people could keep their existing health insurance plans for one more year, he threw in the adjective “substandard” to compare those plans to the shiny new health care policies associated with his so-called Affordable Care Act.

But within the pages of the latest National Review, Manhattan Institute senior fellow Avik Roy examines the claim that canceled health plans were substandard.

The president has also tried to argue that, yes, it’s not true that you can keep your plan, and yes, it’s not true that only 5 percent of Americans can’t keep theirs, but none of this matters, because the old plans weren’t good enough. Obamacare serves to protect consumers from these “substandard” plans — you should be glad your old plan is now illegal.

But this isn’t true. If you already have insurance, you don’t benefit from a provision that forces insurers to cover everyone regardless of preexisting conditions. That provision doesn’t benefit most people; there are fewer than 1 million Americans with whom insurers won’t do business because of their health status. And if you’re reasonably healthy, you don’t benefit from Obamacare’s rule forcing insurers to charge the healthy the same prices as the sick. And regardless of the state of your health today, Obamacare imposes a laundry list of taxes and fees on your insurance plan that doesn’t do anything to make it better — just costlier.

In fact, it’s the new plans under Obamacare that can rightly be called “substandard.” Plans sold on Obamacare’s exchanges tend to narrowly limit your choice of doctors. They have higher deductibles. In a free market for health insurance, people might choose such plans because they would come with lower premiums. But under Obamacare, these plans come with higher premiums. In other words, Obamacare forces millions of Americans to pay more for health insurance that covers less than their old plans did.

Roy goes on to explain how “substandard” also offers an apt description of Medicaid, “the industrialized world’s worst health-insurance program.” “Obamacare substantially expands the Medicaid program; indeed, the law depends on Medicaid to provide half of the new coverage that it extends to the uninsured.”

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