You don't believe lowering the average age and increasing the average health of the pool of insured will lower per-person insurance costs?
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Re: ObamaCare: Bad for the Employment
Thu Oct 11, 2012 at 01:24:23 PM EST
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You don't believe that raising demand, lowering supply, and increasing what is covered by insurance will raise per-person costs?
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Re: ObamaCare: Bad for the Employment
Thu Oct 11, 2012 at 01:43:31 PM EST
5.00 (agreed)
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That part will raise prices, diluting the risk pool with young people should have some lowering effect. Which effect is larger remains to be seen (young people really don't use many medical services but will be paying premiums).
Encouraging high-deductible plans would have definitely kept demand in check, but (to me) the most retarded part of Obamacare effectively eliminated high-deductible plans.
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Re: ObamaCare: Bad for the Employment
Thu Oct 11, 2012 at 02:17:30 PM EST
5.00 (astute)
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"the most retarded part of Obamacare effectively eliminated high-deductible plans."
Which makes sense if your goal isn't improving health care, but increased statism.
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Re: ObamaCare: Bad for the Employment
Thu Oct 11, 2012 at 03:00:09 PM EST
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In this case, no, raising demand will not increase per-person costs because of the manner in which demand is being raised as tjb notes. How is supply being lowered?
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Re: ObamaCare: Bad for the Employment
Thu Oct 11, 2012 at 03:19:15 PM EST
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raising demand will not increase per-person costs because of the manner in which demand is being raised
I'm no quite so unequivocal about that - both arguments are true: demand will go up, but insurance pools will be diluted by young people, but very expensive people (pre-existing conditions) will also be force-merged into the insurance pools as well.
It isn't terribly clear to me which effect will dominate.
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Re: ObamaCare: Bad for the Employment
Thu Oct 11, 2012 at 03:33:02 PM EST
1.00 (meretricious)
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It isn't clear to me, either, what the net effect will be, but I was pointing to one specific increase in demand-- young, healthy people added to the pool-- just as zyxwvutsr was pointing to one specific change with his writeup. The result of that change is pretty straightforward to predict and concluding that adding those folks to the insurance rolls is going to increase prices is, in zyxwvutsr's words, the result of magical thinking.
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Re: ObamaCare: Bad for the Employment
Thu Oct 11, 2012 at 03:40:28 PM EST
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And by my bolded "that", I'm referring to the forcing into the pool of young, healthy people.
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Re: ObamaCare: Bad for the Employment
Fri Oct 12, 2012 at 09:43:13 AM EST
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In this context all that matters is that there are currently zero-cost employees who will become a cost. We're not talking about the health insurance system as a whole, but the tiny subset of the system that exists in a single workplace.
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Re: ObamaCare: Bad for the Employment
Fri Oct 12, 2012 at 09:40:32 AM EST
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Yes, per-person costs will increase. How could it be otherwise when we're talking about covering people (mostly young, but whatever) who are zero-cost today? The average cost could come down due to adding low-risk employees to the premium pool, but the total cost will rise. (This is inevitable unless every low-risk person currently not covered uses literally no health care once they become covered. That is so dramatically unlikely that we can dismiss the idea altogether.)
We should anticipate supply constraints as a side effect of the ACA (unintended though they may be - but that just goes to show how little the Democrats understand economic reality) for a number of reasons.
- If you consult any basic economics text you will no doubt find a reference to shifts of the supply curve caused by the imposition of government regulations. (This is so basic, in fact, that I am more than a little surprised that you are unaware of it.) We need not try to predict the precise form of the activities that will drive that shift to know that it will occur.
- The types of insurance products allowed under the ACA is constrained. The most obvious example already mentioned in this discussion is the effective prohibition of high-deductible plans, but there will be many other types of coverage that will not be allowed.
- We are already seeing consolidation of suppliers in the health care system in response to the ACA.
- There is reason to expect that physicians will reduce their workload in response to the types of price controls that are inevitable if there is an attempt to control overall spending through the ACA.
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Re: ObamaCare: Bad for the Employment
Mon Oct 15, 2012 at 09:03:37 AM EST
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Yes, per-person costs will increase. How could it be otherwise when we're talking about covering people (mostly young, but whatever) who are zero-cost today? The average cost could come down due to adding low-risk employees to the premium pool, but the total cost will rise.
In terms of employers who already pay for health insurance, all that they care about is the average or per-person* cost. By forcing into the pool those who would opt out because they make the bet that they're young and healthy enough that it's worth the risk, you'll be lowering those average costs. Certainly, there are other competing effects from ACA, but that is the only effect I was commenting on-- just as your writeup was specifically focused on the increased cost of hiring lower skilled workers.
As for 1-4, all fair points, but I thought you were referring to a supply reduction caused by forcing the young and healthy into the pool. I think we were talking past each other a bit.
*Per-person in the pool, not per-person in the US population.
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Re: ObamaCare: Bad for the Employment
Mon Oct 15, 2012 at 09:25:52 AM EST
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In terms of employers who already pay for health insurance, all that they care about is the average or per-person* cost
That's ridiculous. Total cost if far more important.
Suppose 10% of my eligible workforce ops out of health insurance coverage currently. Under ACA my covered workforce will increase 11%. You are assuming that the average cost will decrease because much of the 10% who opt out are healthy - that's a fine assumption to make even though you don't know by how much the average premium will decrease,* but it is impossible for the total cost to decrease.
* It also assumes away the other provisions of ACA that will cause premiums to rise which will give even more incentive to employers to reduce the size of the full-time workforce.
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Re: ObamaCare: Bad for the Employment
Mon Oct 15, 2012 at 10:09:59 AM EST
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You're right. I was assuming that if an employer offers coverage, employees take it. So, to correct my statement: the net effect will be a decrease if the per-person cost is reduced a greater percentage than the percentage increase in employees taking the coverage.
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Re: ObamaCare: Bad for the Employment
Mon Oct 15, 2012 at 11:28:42 AM EST
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Re: ObamaCare: Bad for the Employment
Mon Oct 15, 2012 at 11:59:16 AM EST
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Re: ObamaCare: Bad for the Employment
Mon Oct 15, 2012 at 03:49:03 PM EST
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Re: ObamaCare: Bad for the Employment
Tue Oct 16, 2012 at 09:50:04 AM EST
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"Zyxwvutsr doesn't understand" is not the same as "magical thinking".
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Re: ObamaCare: Bad for the Employment
Tue Oct 16, 2012 at 09:50:37 AM EST
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Then explain how total cost could possibly go down.
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Re: ObamaCare: Bad for the Employment
Tue Oct 16, 2012 at 10:07:46 AM EST
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The pool that affects the per-person price is not the same as the pool that affects the employer's total cost. If participation in the employer's plan was sufficiently high prior to ACA, the percentage decrease in per-person cost could be higher than the percentage increase in people participating in the plan.
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Re: ObamaCare: Bad for the Employment
Tue Oct 16, 2012 at 10:27:10 AM EST
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What comprises the new pool?