"
Someone tells you that you have to buy something, and levies a
penalty if you don't. So you buy it. Then someone else countermands the
first person's order. You no longer have to buy it. So, assuming it's
not because the price of what you had to buy rose, you don't buy it. Are
you worse off?
Various media outlets have reported on the loss of health insurance that the
Congressional Budget Office thinks
will come about if Congress gets rid of the mandate that requires
individuals to buy health insurance. Estimating the effects of changes
in laws is always tricky, of course. What's not tricky is to explain to
readers something that many of the reports don't do a good job of.
Are you ready?
Many of the people who will "lose" health insurance if the mandate is repealed are people who
want to lose health insurance.
That is, according to the CBO, what is causing them to get health
insurance now is the mandate. So, by their standards, even if we,
observing them paternalistically, might think different, they would be
better off.
How many of the millions who lose health insurance are people who
want to lose it? We can't tell exactly but we can probably come close.
Let's take the number that many people are focusing on--the number of
people who will be without health insurance in 2027 who would otherwise
have it: 13 million. Of these, we know, if the CBO is correct, that
fully 5 million people want to be without health insurance. How do we
know? Because they would otherwise be on Medicaid. They would choose to
be without Medicaid even though they could be on it. And it's not
because the price to them of Medicaid would change. The price, excluding
their time cost to apply and qualify, is zero with or without the
mandate.
Another 5 million would drop their non-group coverage, according to
the CBO. Some of these would be healthier people willing to do without
health insurance who don't find the current rates attractive. Let's
guesstimate that this would be half of the five million, or 2.5 million.
I think that's probably an underestimate. Why would the other half drop
their insurance? Because, estimates the CBO, with fewer healthy people
in the pool, insurance rates for non-group coverage would rise by about
10%.
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