Michael Barone

Such employers would have to pay a $3,000 penalty for each employee who buys insurance on Obamacare's health insurance exchanges. But it seems likely that many workers, especially young ones, would opt not to pay the hefty premiums for that.

The problem here is that Obamacare's architects seem to misunderstand the concept of insurance.

People buy insurance to pay for low-probability, high-cost and undesirable events. It doesn't make sense to hold onto enough cash to replace your house if it burns when you can buy an insurance policy that will cover that unlikely disaster.

But Health and Human Services Secretary Kathleen Sebelius has a different idea of what insurance is.

In response to an American Society of Actuaries report that health insurance premiums would rise 32 percent under Obamacare, she said, "Some of these folks have very high catastrophic plans that don't pay for anything unless you get hit by a bus."

Her idea apparently is that insurance should pay for just about every health care procedure.

In her defense, the World War II decision to make the cost of health insurance deductible for employers and nontaxable for employees has moved things in that direction. Many people have come to expect that.

But as the Daily Beast's Megan McArdle commented, "Coverage of routine, predictable services is not insurance at all; it's a spectacularly inefficient prepayment plan."

Some Obamacare architects, including its namesake, want to move toward a single-payer system in which government would pay all health care costs.

Many Obamacare opponents want a bigger role for markets, allowing consumers to choose insurance that covers catastrophes and paying for routine costs with tax-free (and in some cases subsidized) dollars.

But if large numbers of employees are enrolled in "skinny" health insurance plans, as the Wall Street Journal article suggests, Obamacare will have produced an unanticipated outcome no one wants.

People stuck with these policies will have insurance that pays for the equivalent of oil changes (up to six a year!) but not for the equivalent of wrecked car. Just the opposite of real insurance.


Michael Barone

Michael Barone, senior political analyst for The Washington Examiner (www.washingtonexaminer.com), is a resident fellow at the American Enterprise Institute, a Fox News Channel contributor and a co-author of The Almanac of American Politics. To find out more about Michael Barone, and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at www.creators.com. COPYRIGHT 2011 THE WASHINGTON EXAMINER. DISTRIBUTED BY CREATORS.COM