Martin Feldstein: ObamaCare Could Increase the Number of Uninsured
Consider: 27 million people are covered by health insurance purchased directly, i.e. outside employer-based plans. The average cost of an insurance policy with family coverage in 2009 is $13,375. A married couple with a median family income of $75,000 who choose not to insure would be subject to a fine of 2.5 percent of that $75,000, or $1,875. So the family would save a net $11,500 by not insuring. If a serious illness occurs — a chronic condition or a condition that requires surgery — they could then buy insurance. Since fewer than one family in four has annual health-care costs that exceed $10,000, the decision to drop coverage looks like a good bet. For a lower-income family, the fine is smaller, and the incentive to be uninsured is even greater.
Very interesting point and one that is being overlooked by almost everbody else.
This is the only place I have sen this point made.
Assuming people act in their self interest, a rise in the number of uninsured seems almost inevitable.
Apparently, the lower your income, the more attractive it appears to remain uninsured if you are healthy. But that’s exactly the situation right now. I am afraid we are about to spend one trillion dollars and accomplish nothing.
Another point that seems overlooked is that the architects of the health reform bills moving through Congress don’t understand that self-interested individuals will not necessarily act in the way Congress expects them to. As Feldstein illustrates, rational people might act counter to how Congress hopes they will act.
I think ‘architects’ is a bit over-generous. The process reminds me more of a group of sixth-grade girls working on a class project. They have learned to avoid conflict by including each participant’s contribution without criticism, with the hope of impressing the teacher with the volume of their output.
And then there’s the arrogance of assuming that any unforeseen consequence can be easily fixed with some legislative fine-tuning later on or else blamed on the opposition.