Deductibles Are the Price You Pay for Obamacare

This weekend, in the New York Times, Robert Pear wrote about the high deductibles of the exchange policies that most people are buying. While some things, such as birth control and an annual wellness visit, must be covered, effectively these are catastrophic policies that require people to spend a considerable amount of money out of pocket before the coverage kicks in. This has come as quite a shock to many; as one person told Pear, “When they said affordable, I thought they really meant affordable.” Which it is -- if you don’t get sick.

This is actually good insurance design. Insurance that covers routine expenses isn’t really insurance; it’s a sort of inefficiently expensive prepayment plan. If Obamacare forces people away from "first dollar" coverage with low or no deductible, and toward plans that cover people only for unanticipated emergencies, that would be a win for economic logic.