Topics: Obamacare

Government doesn't work as a health insurance middleman

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Diana Furchtgott Roth,Columnists,Barack Obama,Obamacare,Health and Human Services,Analysis,Healthcare.gov

What a novel idea. President Obama is considering allowing Americans to buy health insurance directly from insurers rather than through healthcare.gov.

Although Obama sees direct purchases from insurers as a stop-gap measure until the website is fixed, abandoning healthcare.gov permanently would go halfway toward solving the Obamacare mess.

The other half would be to allow insurance companies to sell any products they want.

Insurance companies should be able to issue any policies they like for the foreseeable future, subject to state regulation. Then people will get the policies they want to buy.

One objective of healthcare.gov was to allow people to compare plans. But people routinely compare prices for airline tickets and other products with private sector websites.

As everyone has seen, the government has not been able to create a decent health insurance website.

Another objective of the Obamacare website was to give subsidies. But the government delivers housing vouchers and food stamps without a website.

Those who cannot afford health insurance should be offered refundable tax credits to purchase it themselves, so they can have the same choice of doctors and services as other Americans.

The so-called "Upton Bill," which passed the House of Representatives on Friday by a 261 to 157 margin, with 39 Democrats joining all the body's Republicans, would allow insurance companies to issue 2013 policies through 2014 as a temporary remedy to the cancellations.

This is a start, but it just delays the problem for a year. If people want to keep their plans, they should be able to keep them past 2014.

Those health insurance policies that are getting cancelled cannot legally be issued under the Affordable Care Act. It is illegal to sell certain health insurance policies.

This is because Obamacare mandates a generous one-size-fits-all plan for health insurance, with required free routine care, mandatory mental health, maternity, abortion and drug abuse coverage, and unlimited lifetime care.

Plus, since people can pay a tax to opt out and only sign up when they become sick, health insurance becomes very expensive.

Back in June 2010, the Obama administration estimated that an average of 93 million people would lose their health plans in 2013, yet the president feigns surprise today.

On page 34,553 of the June 17, 2010, edition of the Federal Register, the administration’s mid-range estimate was that 51 percent of employer plans would lose their grandfathered status by 2013. That translates into 80 million people. The high-end estimate was 69 percent, or 108 million people.

On the same Federal Register page, the Obama administration estimated that at least 40 to 67 percent of people with individual plans, those not covered by employer-provided health insurance, would lose their plans in 2013. This adds up to another 13 million people.

The error-prone Obamacare website is just the beginning of the problem. There is no end in sight to health insurance problems until the Obama administration lifts the restrictions and allows insurance companies to issue a variety of plans from which people can choose, subject to state approval.

Companies should be allowed to sell plans nationally, so that people can see specialists outside their communities.

States should take over the cost of those 2 to 4 million people a year with uninsurable conditions — about 1 percent of the U.S. population.

Such individuals would receive health insurance, subsidized by the state, through regular insurance companies.

The health insurance policy cancellations show us that something is terribly wrong with the Affordable Care Act.

Yes, Mr. President, abandon healthcare.gov and allow Americans to buy insurance directly from insurance companies, just like in the old days.

Examiner Columnist Diana Furchtgott-Roth (dfr@manhattan-institute.org), former chief economist at the U.S. Department of Labor, is a senior fellow and director of Economics21 at the Manhattan Institute for Policy Research.
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Diana Furchtgott-Roth

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The Washington Examiner