If Horrible Insurance Is Outlawed, Only Outlaws Will Have Horrible Insurance

by Jonathan Chait | October 6, 2010

During the forced famine in the Ukraine under Stalin, you had mass starvation, and one of the things people to survive did was sell some kind of gelatinous stew that actually consisted of human flesh. (The purpose of selling the stuff was so that everybody could tell each other they were eating something non-human based.) Now, suppose the government changed policies and ended the famine. Would you complain that they're putting the flesh-sellers out of business and taking away a major source of nutrition?

That's basically what's happening in health care. McDonald's, for instance, has a bare-bones health insurance plan it sells to its employees. That insurance is going to go out of business due to the Affordable Care Act. Is that a problem? No, explains David Leonhardt. The problem is that people had to buy that insurance in the first place:

Consider what it would be like to have a health insurance plan that capped annual benefits at $2,000. For any medical care costing more than that, you would have to pay out of pocket.
Examples of care that costs more than $2,000 — and often a lot more — include virtually any cancer treatment, any heart surgery, a year’s worth of diabetes treatment and care for many broken bones. Even a single M.R.I. exam can cost more than $2,000. A typical hospital stay runs thousands of dollars more.
So does this insurance plan sound like part of the solution for the country’s health care system — or part of the problem?
A $2,000 plan happens to be one of the main plans that McDonald’s offers its employees.

Now, in a system where everybody who's not elderly is on their own, McDonald's health care plan can be marginally useful. But having a plan that only covers the first $2,000 in expenses is a terrible situation to be in. I'm pretty happy those people now have a chance to buy a real, affordable health care plan.

(See also Jonathan Cohn's earlier take on this issue.)

Source URL: http://www.newrepublic.com//blog/jonathan-chait/78190/if-horrible-insurance-outlawed-only-outlaws-will-have-horrible-insurance