• Hey kids: please don’t “go bare”

    I really liked Adrianna’s last column, “Read the fine print before you burn your Obamacare card.” We had a twitter exchange about it this morning with the Cato Institute’s Michael Cannon (@mfcannon, who tweeted: “Going bare not risk-free but more rational than u suggest.”

    Michael’s a cordial guy. Let’s just say that advice to “young invincibles” about “going bare” is a singularly unfortunate metaphor for those of us working in public health, (or, for that matter, those of us who have teenage kids). More here.

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    • Economists have a saying: a bet is a tax on bullshit. So lets see how rational Cannon actually thinks going bare is: is he willing to do it himself? Somehow I doubt he is.

      • The most basic reason for insurance (classical) is to protect one’s assets. Young people frequently have very little if anything to protect. Michael Cannon probably has a good deal to protect so it would be rational for him to buy insurance, but may not be rational for a young person to do the same based upon the basic reason stated above.

        • Young people don’t always have many assets, but as the bloggers here and elsewhere have detailed getting sick may not just cause you to lose assets if you run up a large bill. It can mean incurring a 5-6 figure debt you may never pay off. Your credit rating can be ruined forever, preventing you from buying a car or a house. You can wind up in bankruptcy court. If your parents have any assets to speak of, your costs may be shifted to them. And this is assuming that lack of insurance doesn’t impede your access to necessary healthcare, a fairly dubious assumption in the US.
          But let’s grant for the moment the argument that young people generally don’t have many financial assets to protect. Is Cannon making this argument to the interns and new hires at Cato, and encouraging them not to enroll in the company health plan? Is he encouraging young Republican congressional staffers on capitol hill not to enroll in FEHB? I doubt he is.

    • “Going uninsured is also socially irresponsible.”

      If one believes going uninsured is irresponsible then doesn’t one think it better that we focus on seeing to it that the young are insured? How does artificially raising the price for offsetting risk on the young help us in that endeavor?

      • If you can come up witha legislative strategy that will get us to Medicare for all, I’m with you, sister.

        • Medicare for all has problems as well. Take a look at the Medicare program and how costs keep rising at a rate greater than normal inflation. That is unsustainable and thus is not a reasonable idea without significant changes to the program that have not yet been proposed.

    • The questions, which this does not address, are the likelihood that these healthy young people will need care, the cost, and whether the insurance premiums are good investments. It seems inescapable that, if they all were to participate, the average healthy young person would pay more in premiums than they would collect in benefits. If not, then it would be counterproductive to sign them up.

      Rather than foolish, refusing to sign up would be the most logical course.

      • Except that young people have accidents and get sick. Also, they generally don’t have much in savings. If you have a bankruptcy, even from ginormous hospital bills, you will have a hard time renting housing, purchasing transportation, and passing employer background checks for many, many years to come. The total cost of a medical problem for an uninsured person may be quite high.

      • Nearly everyone who buys insurance pays more in premiums than they collect in benefits. That’s the whole point. If that wasn’t the case, insurance would not work and it would be impossible for insurers to stay in business.

        We have chosen, for reasons both rational and not so rational, to have an insurance-based health care financing system. Such a system requires that nearly all participate. Not participating is the equivalent of passing your risk to others. That’s the reason the Heritage Foundation called this scheme “personal responsibility” when they came up with it.

        If you can come up with an insurance-based system that doesn’t involve most participants paying in more than they take out on annual basis, I’m all ears.

        • Sheldon, I think everyone realizes that in order to sell risk they have to sell it for above the marginal price. I don’t know what you are trying to say by:

          “We have chosen, for reasons both rational and not so rational, to have an insurance-based health care financing system.” Selling risk is something that has been done for ages.

          Recently the idea behind traditional insurance has been altered by some to include elements of prepaid care that makes things quite confusing when people use the word insurance and don’t agree on its meaning.

          Traditional insurance is risk based and doesn’t require everyone to participate. Personal responsibility means just that. One takes personal responsibility for their health care costs whether they carry insurance or not. I don’t know what you are attributing to the Heritage Foundation.

    • No argument that it is better to have health insurance than not when one has high expenses. But this does not make insurance a good deal, no matter the price. At some point it becomes too expensive for the expected benefit. The lower the likelihood of needing the coverage, the less valuable it is. It could be entirely rational to look at costs, coverage, and one’s health and to conclude that the cost is too high. Even if you throw in a penalty to pressure the “choice” the price may remain too high. If so, then a system based on systematically overcharging the young might fail. Younger people do not support their ability to buy insurance later by buying now. that could be the case if eligibility at, say, age 45 required participation at 25. It doesn’t. One could decline coverage every year from 25 to 45, then start participating after a cancer diagnosis.