Can We Stop Calling Them "Consumer Protections" Now?

January 17, 2011

Supporters of the health law are lamenting how the nickname "ObamaCare" has achieved wider purchase than the law's official title.  More egregious, though, is how supporters have successfully misbranded ObamaCare's health insurance regulations as "consumer protections," says Michael F. Cannon, director of health policy studies at the Cato Institute.

"Consumer protections" already in place limit the percentage of revenues insurers can spend on administrative expenses and prohibit them from turning away children with pre-existing conditions.  Who could object to such rules?  As it happens, an awful lot of people.

  • These supposed consumer protections are hurting millions of Americans by increasing the cost of insurance, increasing the cost of hiring and driving insurers out of business.
  • Such mandates force consumers to divert income from food, housing and education to pay for the additional coverage.
  • Mandates can also force employers to reduce hiring, leaving some Americans with neither a job nor health insurance.
  • In addition, the ban on discriminating against children with pre-existing conditions has caused insurers to stop selling child-only policies in dozens of states.

The list goes on.  ObamaCare now forces insurers to spend no more than 20 percent of revenues -- 15 percent for large employers -- on administrative expenses.  Similar state laws have done nothing to slow the growth of premiums.  Consumers, insurers, employers, unions and state officials are begging for protection from these so-called protections.  Sebelius has so far issued 222 waivers, which raises the question: if these were really consumer protections, why waive them?

Source: Michael F. Cannon, "Can We Stop Calling Them 'Consumer Protections' Now?" Kaiser Health News, January 10, 2011.

For text:

http://www.kaiserhealthnews.org/Columns/2011/January/011011cannon.aspx

 

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