Sunday, July 25, 2010

Unintended Health Insurance Consequences

Some major health insurance companies will no longer issue certain types of policies for children, an unintended consequence of President Barack Obama's health care overhaul law, state officials said Friday.

[ . . . ]

The major types of coverage for children - employer plans and government programs - are not be affected by the disruption. But a subset of policies - those that cover children as individuals - may run into problems. Even so, insurers are not canceling children's coverage already issued, but refusing to write new policies.

The administration reacted sharply to the pullback. "We're disappointed that a small number of insurance companies are taking this unwarranted and unnecessary step," said Jessica Santillo, a spokeswoman for the Health and Human Services department.
Yesterday it was unintended consequences of "financial reform."

I wonder how people in the administration know these actions by insurance companies are "unwarranted and unnecessary?" It seems to me they must lack the knowledge these businesses need in their efforts to make a profit, and thus a living for many people, by supplying others with health insurance. The "health care reform" statute seems to attempt to force insurance businesses to structure risk pools in specific ways that would not otherwise have been chosen by these businesses. It seems to me one likely result of such government actions will be that at least some insurance businesses find that it is better to stop insuring than to try to earn a living insuring and following the government's new statute.

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