The Affordable Care Act requires health insurance plans to spend at least 85 percent of their premium income on medical care and no more than 20 percent on “administrative costs”—the portion of insurance premiums that are not spent on medical care.[1] Here’s one immediate problem: no one knows how to define “administration.” Just as...
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The Affordable Care Act is expected to add up to 16 million more Medicaid enrollees and will significantly expand eligibility for families with incomes up to 133 percent of the federal poverty level. Initially, the federal government will pay 100 percent of the cost of the newly eligible, newly enrolled populations and 95 percent...
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One of the most oft-repeated arguments for health reform is to reduce costly and delayed trips to the emergency room by uninsured patients. But will that happen? The heaviest users of the ER (in proportion to their numbers) are Medicaid patients (perhaps because many doctors won’t accept them), and more than half of the...
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The term crony capitalism has appeared frequently in the popular press of late, but rarely has it been used—let alone defined—in the academic literature. Independent Institute Research Fellow Randall G. Holcombe, a frequent contributor to The Beacon, helps remedy this deficiency in an article published in the Spring 2013 issue of The Independent Review. “Crony capitalism,”...
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The most obvious way to avoid a huge imbalance between the supply and the demand for medical care (especially primary care) is to abolish the requirement that health plans provide a long list of preventive services with no co-pay or deductible. In addition, nurses, physicians’ assistants, and other paramedical personnel should have greater freedom...
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In recent blog posts I’ve discussed how the Affordable Care Act creates perverse incentives for employers and insurers. In this piece I’ll touch briefly on how it creates perverse incentives for individuals. (For more discussion, please see my Independent Institute book, Priceless: Curing the Healthcare Crisis.) One can get a glimpse of the problem...
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The Spring 2013 issue of The Independent Review—the Independent Institute’s flagship scholarly journal, edited by Robert Higgs—is hot off the press. Below you’ll find links to articles and book reviews that address a host of intriguing questions: Why have domestic police agencies across the United States resorted increasingly to “no-knock” raids and other military-type...
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Under the current system virtually all employers and group insurers have perverse incentives to attract the healthy and avoid the sick. Once people have enrolled, the incentives are to overprovide to the healthy (to encourage them to stay) and underprovide to the sick (to encourage them to leave). Managed Competition in the Healthcare Exchanges...
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In my previous post I explained that the subsidies of the Patient Protection and Affordable Care Act are regressive and unfair and create high marginal tax rates. What would a better approach look like? To achieve the ideal, the federal government should offer people the same tax relief for the purchase of health insurance,...
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The Affordable Care Act offers radically different subsidies to people at the same income level, depending on where they obtain their health insurance—at work, through an exchange, or through Medicaid. These subsidies are arbitrary, unfair, and even regressive. Along with the accompanying mandates, they will cause millions of employees to lose their employer plans...
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