Similarly, another provision of Obamacare that the president frequently talks about is a ban on insurers’ discriminating against preexisting conditions for children. (The provisions for children have already taken effect, while the preexisting condition provisions for adults don’t start until 2014). Not surprisingly, this encouraged parents with sick children to rush to sign them up for coverage. Good for them. But parents with healthy children were less likely to get coverage, especially since the inflow of sick children drove up premiums. Faced with this “adverse selection death spiral,” insurers in 20 states have responded by discontinuing “child only” insurance coverage. Thus, thousands of parents will now either have to purchase much more expensive family coverage or else forgo insurance for their children altogether.
Millions of workers may also soon find themselves uninsured, or at least dumped off their current employer plan. A new survey by Deloitte released this week suggests that at least 10 percent of employers plan to drop their coverage in the next couple of years as a result of Obamacare. And, it could be worse: A separate survey by McKinsey & Company put the number of companies considering dropping their coverage as high as 30 percent. Of course many of the workers will be able to get coverage and possibly subsidies through the exchanges, but they will certainly face fewer choices and higher prices.
Nor should we forget that across the country there are people who are not being hired or, worse, are being laid off, because employers cannot afford the cost of insurance, especially since Obamacare has not only failed to curb rising insurance costs, it has already added 2–3 percent to premium prices. These unemployed workers are more of the unseen victims of Obamacare.
This is a lesson that goes well beyond Obamacare. Politicians often act as though government programs are cost free. President Obama, in particular, seems to believe that government intervention comes without any down side. Regulations do only good. Taxes don’t harm anyone — except maybe a few rich people, and they don’t count anyway. But there are always costs and unexpected consequences. Those costs and consequences may not be as easily seen as the goodies that government distributes, but they are no less real.
Or as another great economist, Milton Friedman, put it two hundred years after Bastiat, “There’s no such thing as a free lunch.”
— Michael Tanner is a senior fellow at the Cato Institute and author of Leviathan on the Right: How Big-Government Conservatism Brought Down the Republican Revolution.