Tuesday, June 14, 2011

McArdle on High Risk Pools

In her 6/2/2011 blog post for The Atlantic, Megan McArdle asks a interesting question: "Why Hasn't Anyone Signed Up For the High-Risk Health Insurance Pools?"

She notes that ObamaCare supporters repeatedly argued that the law was necessary because millions of Americans were supposedly uninsurable because of "pre-existing conditions". Part of ObamaCare legislation included setting up government-sponsored "high risk" pools to enable these people to obtain insurance coverage that they could not otherwise find in the current mixed (semi-regulated/semi-free) economy.

Yet very few have chosen to do so, despite the relatively affordable subsidized prices.

It's almost as if the Obama administration had exaggerated the extent of the problem for political purposes!

There is a genuine problem of some Americans having a difficult time obtaining insurance, due to our current perverse system of tying insurance to employment (an artifact of government regulations going back to World War 2). But this problem cannot be solved by further regulations. Rather we need free-market insurance reforms.

For a discussion on how a free market would help those with pre-existing conditions, see my article in the Fall 2009 issue of The Objective Standard, "How the Freedom to Contract Protects Insurability".