The Corner

Re: ‘Most People’ Will Be Able to Keep Their Plans Under Obamacare

Andrew notes below David Axelrod’s revision of the president’s promise that all Americans will be able to keep their health plans if they so desire — now, it’s just “most people” who’ll be able to do that. But this isn’t quite accurate, if we’re talking about Americans who buy their health-care plans on their own. Millions of Americans on the individual market have already received plan-cancellation notices, and insurance consultant Bob Laszewski estimates that 16 million Americans, out of the 19 million on the individual market, have plans that won’t meet Obamacare regulations in 2014 (some could be grandfathered in, but any change to the plan deprives them of that status). Even states like New Jersey, which had heavily regulated insurance, incredibly pricey, and almost broken-down insurance markets before Obamacare, are kicking large numbers of people off their plans — 800,000 in the Garden State’s case.

Josh Barro of Business Insider argues that plenty of Americans who like their health-care plans shouldn’t be able to keep them. But regardless of the liberty interest (and the president’s bright-line promise), for now, the winnowing of the health-care market doesn’t seem to be doing a good job putting people into more sensible and efficient plans. He’s correct to note that some employers are going to curtail the generosity of their plans because of the Cadillac tax (maybe even Goldman Sachs will — we’ll see whether the Cruzes complain), which is a positive development. But many plans are being cancelled because they’re not comprehensive enough, or have too large a deductible, both not problems in the American health-care system that need to be fixed. Obamacare will lay essential-benefit requirements for all kinds of potentially unnecessary services on people who didn’t want to buy them (this is already a feature of the states where health insurance is most expensive). Barro’s right that the health-care market is seriously distorted and needs reform; the idea that the plans Obamacare outlaws represents a good development in this direction is much more dubious. As Barro admits, by far the biggest problem with our health-insurance market is the huge tax subsidy for employer-subsidized insurance that’s biggest for the most generous plans; Obamacare doesn’t do anything about this except make insurance more expensive but still tax-free for employers, and offer a tax subsidy for individual plans that’s biggest for the most generous plans.

Patrick Brennan — Patrick Brennan is a writer and policy analyst based in Washington, D.C. He was Director of Digital Content for Marco Rubio's presidential campaign, writing op-eds, policy content, and leading the ...

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