December 29, 2010

REGARDLESS OF WHETHER IT IS COHERENT AND/OR DISASTROUS...:

Ruling could backfire on health-care critics: A step closer to much feared 'socialized medicine.' (Robert A. Burt and Theodore R. Marmor, 12/28/10, Philadelphia Inquirer)

[Henry Hudson, the Virginia federal district judge] ruled that the individual insurance mandate was the only part of the health-care law that violated the Constitution. He left intact the provisions forbidding insurance companies from excluding applicants based on preexisting health conditions and from imposing caps on medical expenditures once the insured person became ill. The judge held that these provisions did not interfere with the liberty of individuals to choose whether to purchase insurance but only restricted the commercial activities of the insurance companies themselves.

As a matter of legal logic, this ruling may be coherent. As a matter of practical economics, however, the ruling would have a disastrously perverse effect.

Insurance companies could collect enough premiums to meet these new obligations about preexisting conditions and capped expenditures only if they could enroll large numbers of healthy individuals. If the restrictions stood alone without the mandate for individual insurance, too many people would wait until they were actually ill before purchasing health insurance.

No sensible company would offer open-ended insurance coverage under such circumstances. Since the health-care law without the individual purchase mandate would forbid companies from protecting themselves against financial loss, any sensible company would simply refuse to offer health insurance to anyone. Alternatively the companies might only offer policies with drastically limited coverage and high deductibles - which would in effect be health insurance for almost no one.


...it's obviously an anti-constitutional ruling.

Posted by Orrin Judd at December 29, 2010 9:23 AM
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