Re:Sputtering Startups Weigh on U.S. Economic Growth
by greeneggs on Monday October 24, 2016 @02:59PM
(#12781750)
> It is awful but the alternative is adverse selection. That is, healthy people see high prices and drop out, leaving the prices to get higher for the sick.
Not exactly. Obamacare has other provisions that make this much worse. For example, Obamacare only allows insurance companies to charge older people at most three times as much as younger customers.
"But it’s worth noting that prior to 2014, there was no federal standard in terms of how rates could vary based on age. It was common for health insurance companies to charge older applicants five or six times a much as they charged younger applicants." [1]
This is a way of subsidizing the old (a better organized interest group), but it makes health insurance massively less cost effective for younger customers.
[1] https://www.healthinsurance.org/faqs/why-would-congress-let-...
One angle of the employer-based system is the "healthy worker" effect. It's almost impossible to answer questions such as "is working in a plutonium factory bad for your health?" because almost any population of workers is healthier than the average population because less healthy people don't work.