Incentives vs. Intentions
By Arnold Kling
As Bryan points out, the incentives in the new health care legislation should discourage people from getting health insurance and discourage employers from providing health insurance. The intent of the legislation is to reduce the number of people who are uninsured.
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?