The unintentional consequences of Obamacare
The Affordable Care Act, better known as Obamacare, was designed with the intention of offering better and more opportunities for individuals to obtain health insurance. The debate of whether we should be forced to have health insurance is not the topic of this blog, but rather has Obamacare truly allowed for better and more opportunities to obtain health insurance.
The legislation has opened the door for more companies to offer health insurance, which satisfies the more side of the equation. However, more is not always better, and it sometimes can make things worse. These new entrants will decrease the price of the most basic plans for consumers which would appear to be a positive outcome from the legislation.
For simplicity, lets say that there are two different types of people that did not have health insurance before Obamacare. Individuals who did not want insurance and individuals who could not afford insurance. The individuals who did not want insurance, mainly due to the idea that they will not use it now, are most likely to choose the most basic plan at the most affordable price. Individuals who could not previously afford insurance are most likely to choose a plan that best fits their needs, which may or may not be basic.
This situation leads to a 'I do not want to pay for it until I need it' type of attitude which goes against the reasoning of having insurance. Insurance is a type of community coffer where everyone contributes in case they may need to use it some time in the future. Healthy individuals, who do not think they need insurance, are paying for it now in case they may become unhealthy at some future point in time. This article discusses that in order to avoid the unwillingness of individuals to pay their portion into the community coffer the health exchange should be built with an oligopoly market. Yes, the prices for basic insurance would be higher, but so would the quality. When it comes to insurance I believe that quality is much more important than price.