The main reason people give for not having health insurance is its cost. Insurers must cover a number of treatments at a variety of providers. The government has also put a price floor on insurance by defining a minimum package of benefits. Without rehashing economics lessons, price floors make it more difficult to buy or sell goods and services.
So having made insurance expensive and thereby increasing the number of uninsured, the benevolent hand of government will now offer something it has not allowed to exist in the private sector, “a low-cost, limited benefit plan.” The state of North Carolina has received a $17 million grant to run a pilot program. The governor’s office stated in a press release:
To qualify, families must be uninsured and at or below 125% of the federal poverty level. Parents must demonstrate that their children are enrolled in or have applied for Medicaid or the state?s CHIP, or otherwise have private insurance coverage. Because of this requirement, the program should increase the number of children with health insurance. Enrollees also will be expected to pay a modest premium and small copayments.
The federal government could save $17 million and the state government could redeploy a number of resources by just allowing private companies to offer insurance policies with fewer benefits.
