Home » Insurance » The Affordable Health Care Act poses ethical dangers to the health insurance industry
To see how the Patient Protection and Affordable Care Act, or "Obamacare," affects the risk of behavior in the health insurance industry, first of all it is important to understand the risk and behavior of the health insurance market. The law increases the risk of behavior in the sector by requiring cover and public input, curbing inflation, establishing minimum requirements and creating a reasonable incentive to force procurement. Moral risk was present in American insurance markets. U. Before Obamacare, but the flaws in the Act were increasing, rather than alleviating those problems.
Moral risk is never good. There are no commonalities, based on behavior, of a risky economic concept. On the other hand, ethical risk implies that there is a situation where one party has the motivation to spend more resources than it would otherwise because the other party is responsible for the costs. The cumulative effect of moral hazard in any market is reducing supply, raising prices and promoting excessive consumption.
Behavioral risk with health insurance
Moral risk is often misunderstood or misrepresented in the health insurance industry. Many argue that health insurance itself is a moral hazard as it reduces the risks of pursuing unhealthy health or other harmful behavior.
This is true only if the costs to customers, or insurance premiums and deductions, are the same for everyone. However, in a competitive market, insurance companies charge high prices for high-risk clients.
Ethical risk is eliminated especially when prices are allowed to reflect actual data. Smoking cigarettes or skydiving decisions looks different when it means that premiums can increase from $ 50 a month to $ 500 a month.
Insurance coverage is important for the same reason. Unfortunately, many laws designed to promote equality keep short of this process. To compensate, insurance companies increase all prices.
In the United States, the risk to health insurance coverage was already endorsed before Obamacare. Tax incentives encourage employer-based health coverage, pushing consumers away from medical costs. As economist Milton Friedman once remarked: "Third-party payment requires medical bureaucratization ... the patient has little incentive to worry about the expense as it is the other party's money."
Ethical risk and the Affordable Health Care Act
The law has 2,500 pages; It is difficult to discuss its impact briefly. Another basic provision is that insurers can no longer refuse coverage for those with pre-existing conditions; a new public health insurance exchange will be established to determine the type and cost of the plans available to consumers; large employers are required to provide health care to employees; All plans should cover the "10 most important benefits" of health insurance; Annual and lifetime restrictions on employer plans are not allowed, and plans are only "cheaper" when expenses are less than 9.5% of household income.
In addition, all uninsured Americans must buy a policy or pay a fine, even though there is a "mass exemption." Knowing that the risk and cost of insurance companies will increase dramatically, this goal is aimed at keeping them in business by forcing low-risk consumers to buy.
Restricting costs, seeking to cover employer and minimum-wage benefits creates a gap between the consumer and the actual cost of health care. The premiums have been tightened since the adoption of the Act, in line with the risky economic outlook.
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