Friday, November 1, 2013

ACA and the Talking Point “Better Coverage”. What Exactly is “Better Coverage” in Regards to Health Insurance or Any Insurance?

With upwards of one million individual health insurance plans already receiving cancellation notices and an estimated additional nine million more cancellations on the horizon, a general talking point coming forth from advocates of ACA (Obamacare) is similar to the following: "The White House does not dispute that many in the individual market will lose their current coverage, but argues they will be offered better coverage in its place, and that many will get tax subsidies that would offset any increased costs." (1)

What exactly is “better coverage”? 

Consumers of insurance are all different as all have individualistic situations based on their particular time and particular circumstance. James Goodfellow who just won the lottery for $100 million likely has no need for health insurance as James can self-insure. Warren Buffett needs health insurance? Jane Goodfellow, age 26, doesn’t want health insurance. Mary Sue with three children wants to allocate $500 per month to insurance while Sam wants a Cadillac plan and allocates $1500 per month for insurance. Which one has “better coverage”? James, Warren, Jane, Mary Sue or Sam?

The answer is that different coverage meets different individualistic situations based on differing time and circumstance. Hence Mary Sue would misallocate resources with Sam’s Cadillac plan and Sam would find very little satisfaction with Mary Sue’s $500 per month plan.

Why is a plan with a low deductible, narrow network, ten essential coverage items and a possible subsidy “better coverage” than a $10,000 deductible catastrophic illness major medical plan that is accepted widely by health-care providers? Why does a health insurance plan that has a price tag of $1200 per month “better coverage” than a health insurance plan with a $600 per month price tag?

Which leads one to examine the central planner’s notional proposition of “better coverage”. ACA, like any central plan, does not account nor can account for different individualist situations based on differing time and circumstance. Hence the central planner needs to put forth bumper sticker sized expressions such as “better coverage” in an Orwellian attempt to convince one that differing time and circumstance of individuals does not in fact exist and only the planner’s time and circumstance exists. (2)

The plans differ; the planners are all alike... - Frédéric Bastiat

Updated 11/03/2013

“Congressional Republicans have stoked consumer fears and confusion with charges that the health care reform law is causing insurers to cancel existing policies and will force many people to pay substantially higher premiums next year for coverage they don’t want. That, they say, violates President Obama’s pledge that if you like the insurance you have, you can keep it.

Obama clearly misspoke when he said that. By law, insurers cannot continue to sell policies that don’t provide the minimum benefits and consumer protections required as of next year. So they’ve sent cancellation notices to hundreds of thousands of people who hold these substandard policies. (At issue here are not the 149 million people covered by employer plans, but the 10 million to 12 million people who buy policies directly on the individual market.)

But insurers are not allowed to abandon enrollees. They must offer consumers options that do comply with the law, and they are scrambling to retain as many of their customers as possible with new policies that are almost certain to be more comprehensive than their old ones.

In all the furor, people forget how terrible many of the soon-to-be-abandoned policies were. Some had deductibles as high as $10,000 or $25,000 and required large co-pays after that, and some didn’t cover hospital care.” - Insurance Policies Not Worth Keeping, New York Times Editorial, 11/03/2013

Observation: Once again an argument emerges of: What exactly is “better coverage”? The New York Times editorial merely argues that time and circumstance of individuals is meaningless and freedom to choose is meaningless.

The argument is basically that their particular type-kind of coverage that they champion is “better coverage”. The New York Times editorial is merely a notional argument putting forth their notional proposition of “better coverage”, purposely-politically framing their notional proposition as fact, argued through verbal virtuosity, then attempting to deny opponents legitimacy. [Yawn]

Link to the entire editorial appears below:

Updated 11/10/2013

For some, losing so-called bad apple health insurance plans will mean paying more for less, Washington Examiner, 11/04/2013


(1) Obama administration knew millions could not keep their health insurance, NBC, 10/29/2013


(2) The Fatal Conceit, The Errors of Socialism, F.A. Hayek







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