The Worst of Both Worlds

One of the reason that people like low-deductible plans is that it ensures that their costs are very predictable: they know how much they are spending every month on health care, almost regardless of circumstances.  (People also like it because they get to purchase health care with pre-tax dollars; absent an HSA, high-deductible plans force people to buy health care with post-tax dollars.)

The advantage of high-deductible plans is that they are cheap: they can often cost a third to a fifth of what low-deductible plans cost.  For young people who are just trying to avoid bankruptcy if they get cancer, or those who are starting a small business and don’t want high overhead but can afford a few thousand out of pocket, the plans are perfect.

ObamaCare gives us the worst of both worlds: relatively expensive plans with absurdly high deductibles. This isn’t Hannah Montana’s “The Best of Both Worlds;” it’s Miley Cyrus’ “Wrecking Ball.”  People are now spending lots of money on premiums every month with no guarantee of limiting their health care spending if they fall ill.

Who could have seen that coming? Oh, wait, all of us.

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Filed under Economics, ObamaCare

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