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Political Attempts to Ignore Economics in Health-care ‘Reform’

October 2, 2010

Adam Fowler for Adam Fowler’s Opinion Blog:

Politicians are experts at ignoring economics. One of their favorite activities is to mandate price and service requirements from private companies and just expect that, like magic, all will be fixed. They seldom acknowledge the perhaps unintended, but yet inevitable, consequences of their wishful mandating.

The most pertinent example is the list of nice-sounding mandates on insurance carriers included in the new health-care ‘reform’ law. Many of them took effect this week.

The list includes, among others, the following requirements:

  • Insurers can no longer deny coverage to children with pre-existing conditions
  • Insurers can no longer put lifetime caps on benefits
  • Preventive services are now free
  • Kids can stay on a their parents’ plan until 26

All of these, of course, will add to the overall costs of insurance policies. There is a difference between “price” (how much is directly charged a consumer for a service) and “cost” (the amount of money required to provide the service). [More]

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