Blog Credo

The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary.

H.L. Mencken

Friday, November 1, 2013

The Fly In Their Ointment

All of the complaints about the roughly 3% of Americans who "lose" under Obamacare miss a fundamental point.

We must admit that 3% of the population is about 9 million people.  That's a non-negligible number.

But the idea that they are losers, as Jon Chait points out, neglects one thing.  That's the way insurance works.  From a strictly cost-benefit analysis, you only want to pay for something you might use.  And if you are young and healthy, that means paying for as little health insurance as possible.

But ACA will require you to pay more (though you will likely get subsidies to help meet the cost), even if you are strapping young buck.  This is necessary to help pay for sicker people.

Again, that's the way insurance works.

The fundamental flaw in this argument - as should be apparent - is that strapping young bucks have no idea when their game of beer soaked flag football goes horribly wrong.

Insurance for the healthy is about managing risk.  Insurance for the insurance companies is about spreading risk.  Insurance for people who need it can be a matter of life and death.

Guess who I care about most.

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