Obamacare’s good and bad innovation

1) About a new study from The Commonwealth Fund, for The UpshotMargot Sanger-Katz wrote,

What was more surprising is that people who got the new coverage were generally happy with the product. Overall, 73 percent of people who bought health plans and 87 percent of those who signed up for Medicaid said they were somewhat or very satisfied with their new health insurance. Seventy-four percent of newly insured Republicans liked their plans. Even 77 percent of people who had insurance before — including members of the much-publicized group whose plans got canceled last year — were happy with their new coverage.

2) About a potentially troubling development, for The New Republic, Jon Cohn wrote,

Perhaps the most alarming I’ve seen comes from Florida, where the AIDS Institute and National Health Law Program accuse four insurers of discriminating against customers and potential customers who are HIV-positive. According to an official complaint, filed with the Department of Health and Human Services, the insurers have structured their drug formularies in ways that make key HIV drugs much more expensive.

Number 1 is suggestive of (though not conclusive) of good innovation in the new health insurance markets: they’re providing plans that most people want. Number 2 is suggestive (though not conclusive) of bad innovation: product designs that select against sicker populations. (Of course, you can flip number 1 around to say that because a sizable minority are not satisfied, that’s evidence of insufficient good, or of some bad, innovation.) These are very crude ways to assess innovation, but it’s what came to my mind when reading the news.

I’m not sure we can ever get all good and no bad innovation in health care markets, if any. That’s also true of public policies and programs. The question is, how do we reasonably maximize the good and minimize the bad? Do we have to trade off equity for efficiency? How much?

I’ve written about good and bad innovation in health insurance and health care markets before here and here.


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