Tyler Cowen

Economist tells joke...

But ...conveniently forgets punch line.

Come 2014, the Affordable Care Act will prevent insurers from discriminating based on pre-existing conditions: cancer victims and stroke survivors will be able to buy insurance at the same price as otherwise similar applicants. Insurance companies may take a hit to profits, but part of the cost will surely be passed on to the lower-cost counterparts to this high-cost pool. Healthy people might be tempted to opt out, but under the new law, they’ll be required to have insurance. This individual mandate is a natural fix to the problem of adverse selection in health insurance: It keeps the lowest-cost participants from opting out, and as a result the market doesn’t unravel. Perhaps unsurprisingly, these solutions rankle the likes of Ron Paul and other libertarians who see the heavy hand of government at work here.

Comments

Popular posts from this blog

Anti-Libertarian: re-post

Uneasy Lies The Head

Book Review: Anaximander By Carlo Rovelli