Insurance: Canceled - IBD - Investors.com

Insurance: Canceled

Posted 06/11/2010 06:58 PM ET

Unintended Consequences: Still more developments show that the Democrats' health care solution won't do what they said but will do what most would say public policy should not do.

We start with the story of Americans being kicked into the ranks of the uninsured. Politico reported that "part of the health care overhaul due to kick in this September" could cause 1 million people to lose their medical care policies.

They'll be cut loose because the new law bans insurers from placing caps on the benefits they pay out. This will force what are known as limited-benefit, defined-benefit or mini-med plans off the market.

These policies don't cost much because they cap the number of doctor visits or restrict the amount of benefits that can be paid in a year. They're especially good for low-income and part-time workers, as well as those who've been turned down for major medical insurance plans.

In 2006, John Edelheit, vice president of sales and marketing at United Group Programs, told an industry publication that the mini-med market "has caught on and spread like wildfire."

In 2007, industry publication ifawebnews.com said mini-meds provide "a meaningful, affordable form of coverage that allows for temporary, part-time, contract and seasonal employees to obtain health coverage."

And last year, trade publication benefitnews.com noted that such plans were "gaining popularity as employers use the policies to expand their benefits programs or provide health coverage for the first time."

But by this fall, the plans will be gone, and the law that we were told would broaden health care coverage will be responsible for throwing a million into the uncertainty of being uninsured.

Also last week, some finally getting-around-to-it reporting told us that health equipment "manufacturers are bristling over a key provision in the nation's new health care law." Under the new regime, firms that make the instruments that improve and save lives are hit with a 2.3% excise tax. The added burden will force them to cut back on innovation and lay off workers.

This will mean a less-than-gushing medical device pipeline. But we're sure the pipeline delivering sobering news about our new health care system will continue to pump steadily, and that we've only seen the beginning of the stream.