Obamacare cost more and provides less

Opinion Journal:
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This political mugging is especially unfair to the people whose plans on the current individual market are being taken away. The majority of these consumers are self-employed or small-business owners. They're middle class, rarely affluent. They took responsibility for their care without government aid, and unlike people in the job-based system, they paid with after-tax dollars.

Now they're being punished for the crime of not subsidizing ObamaCare, even though the individual market was never as dysfunctional or high cost as liberals claim. In 2012, average U.S. individual premiums were $190, ranging from a low of $123 in North Dakota to a high of $385 in Massachusetts. Average premiums for family plans fell that year by 0.5% to $412.

Those numbers come from the 13,000 different policies from 180 insurers sold on eHealthInsurance.com, the online shopping brokerage that works. (Technological wonders never cease.) Individuals can make the trade-offs between costs and benefits for themselves. This wide variety is proof that humans don't all want or need the same thing. If they did, there would be no need for a market and government could satisfy everybody.

That is precisely what the Obama health planners believe they can do. Regulators mandated a very rich level of "essential" health benefits that all plans in the individual market must cover, regardless of cost. This year eHealth EHTH +0.29% reported that its data show individual premiums must be 47% higher than the old average to fund the new categories in the individual market.

Meanwhile, ObamaCare's plans are limited to essentially four. Yes, four. The law converts insurance products on the ObamaCare exchanges into interchangeable commodities that finance the same standard benefit at the same average expense over four tiers known as bronze, silver, gold and platinum.

So, for example, a bronze plan covers 60% of health-care expenses and the beneficiary pays a lower premium to pick up the remaining 40% out of pocket. Platinum carries a higher premium for a 90%-10% split. But there can be little deviation from the formulas—that is, there is little room for innovation or policy choice—to suit customer preferences.

In any case all four tiers are scrap-metal grade, because the rules ObamaCare imposes to create a supposedly superior insurance product are resulting in an objectively inferior medical product. The new mandates and rules raise costs, so insurers must compensate by offering narrow and less costly networks of doctors, hospitals and other providers in their ObamaCare products. Insurers thus restrict care and patient choice of physicians in exchange for discounted reimbursement rates, much as Medicaid does.
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The new plans are a bad deal for those who have to actually pay for them.  They are full of bloatware requirements that are of little to no benefit to most of those in the market.  That is the reason they were not there to begin with.  Free markets work to provide goods and services in the most efficient manner.  Government not so much.

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