Health Care Bill to Insure More People Encourages More People to Not be Insured
Economist Arnold Kling lays out the simple incentive argument for expecting the health care bill to lead to more, not fewer, uninsured Americans in the health care market:
As of now, a rational individual would not choose to obtain health insurance, and a rational new business would not offer health insurance. In both cases, that is because the legislation has made it illegal for health insurers to discriminate against people on the basis of health status. So the cost of obtaining health insurance while you are healthy will stay high–in fact, market forces should send it higher–while the cost of remaining uninsured has dropped dramatically.
Is it time to bet that there will be more Americans uninsured two years from now than there are today? Or will the law produce results that are consistent with intentions, regardless of incentives?
Some interesting stuff in the comments thread complicating the analysis, including conflicting reports on what effect, in the real world, being insured has on the base price that gets charged for medical services.