Monday, November 25, 2013

Wishful Thinking Can't Hold Obamacare Together - Bloomberg


http://www.bloomberg.com/news/2013-11-19/wishful-thinking-can-t-hold-obamacare-together.html
 This is part of McArdle's game theory analysis of obamacare with regard to the dance between politicians and the insurance industry.

"But it's such a small minority" is the administration's rejoinder; the entire individual market covers just 5 percent of the population, and some of those people will be net beneficiaries of Obamacare, thanks to the subsidies. This logic was always a bit shaky -- all the people who are ultimately expected to get additional coverage from the new law, including the Medicaid expansion, amount to only 7.5 percent of the population, so if 5 percent is too small to worry about, then probably so is the number of uninsured. But it's not even true. I mean, it's true that only 5 percent of the population gets its coverage from the individual market. But Obamacare is also making significant changes in the employer market. Twelve percent of workers are expected to be affected by the "Cadillac tax" on especially generous health-care benefits when it kicks in in 2018. When those people find out that they too will be in the group of people who can't keep their plan, even though they like it, they will be livid. The unions, who will be disproportionately affected by this, are already getting restive.

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