Wednesday, August 25, 2010

Just one more reason to move into the folks' basement, kids.

One of the advantages of a free market economy over a command and control one is the increased competition compels the provider of a good or service to provide the consumer options and choices to better fit the needs and circumstances of the consumer.

Say you are a college student wishing to purchase health insurance. Generally speaking, are you going to opt for a expensive gold-plated insurance policy that covers all your doctor visits, hip replacement surgeries and regular check-ups or are you going to choose a bare bones low cost/low benefit plan? Because of your youth and therefore, relative health and because you really need the money for tuition, books, lodging, food, etc., you are most definitely going with the latter option because it much better suits your circumstances.

Unfortunately, for college students across America that may all change.

Colleges and universities say that some rules in the new health law could keep them from offering low-cost, limited-benefit student insurance policies, and they're seeking federal authority to continue offering them.

Their request drew immediate fire from critics, however, who say that student health plans should be held to the same standards that other insurance is.

(italics, ours)

Once again, a reminder that ObamaCare really isn't about optimizing the benefits of your individual health care but rather making sure everyone is receiving the equal amount of health care benefits as miserable as the outcome may be.

Among other things, the colleges want clarification that they won't have to offer the policies to non-students.

Without a number of changes, it may be impossible to continue to offer student health plans, says a letter that the American Council on Education sent Aug. 12 to Health and Human Services Secretary Kathleen Sebelius, signed by 12 other trade associations that represent colleges.

Additionally, the colleges say that some provisions of the law don't apply to their policies, including those that require insurers to spend at least 80 percent of their revenue on medical care and that bar them from setting annual coverage caps.

Many of the provisions at issue don't go into effect until 2014, but the colleges say they need clarity soon because they're negotiating long-term contracts with insurers now.

(italics, ours)

And once again, we see price signaling taking effect as colleges are making rational decisions in bracing for the inevitable disaster that will come with ObamaCare.

As it stands, colleges may be forced to provide only ObamaCare-mandated insurance policies that won't fit the needs of their students as they provide benefits their relatively healthy students don't need and certainly can't afford.

This is a perfect illustration of what happens when a command and control regulatory regime forces consumers into a one-size-fits-all plan.

Exit question: Does this qualify for Nancy's Nuances: a journey of discovery? We're thinking yes as the colleges only discovered what was in the bill after it was passed.

H/T: Hot Air

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