“Adverse Selection” and Obamacare – The New York Times


For the publisher:

In his Economic View column, “For Obamacare to Work, Everyone Must Be In” (August 4), Robert H. Frank described the dilemma of “adverse selection” – the idea that buying health insurance is more financially attractive to those who are sick. , causing more and more healthy people to drop out and leading to higher and higher rates.

In the column, Professor Frank said that “we must ask those who would repeal Obamacare how they propose to solve the problem of adverse selection.”

But some Obamacare opponents want to replace opposing selection with “no selection” – leaving Americans uninsured uninsured. Or maybe they would replace it with “reverse selection,” removing people from Medicaid and other subsidized insurance.

Opponents of Obamacare ignore the financial costs of leaving it as it was. Then they complain that we are spending too much.

BETTY MOQUER

Bala Cynwyd, Pennsylvania, August 4

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For the publisher:

Imagine a lottery in which potential ticket buyers have different expected returns if they win. The smaller the price, the less likely people are to buy it. This is how some healthy Americans view health insurance, and therefore they decline it.

Robert Frank describes such a system – in which relatively healthy people opt out, causing rates to rise gradually for everyone – as “market failure”. But such a “failure” will occur in any market when the government demands that products which have different values ​​and cost different quantities to manufacture, be sold at the same price.

The amount that the healthy participant pays in excess of their expected return is, in essence, a transfer of wealth. In practice, to induce participation in Obamacare, the withdrawal penalty cannot be small – it must be comparable to this amount. As rhetoric, to describe people’s reluctance to voluntarily subsidize others as “market failure” is misleading.

RALPH LINSKER, MD, Ph.D.

Millwood, NY, August 5

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For the publisher:

Remember how some Republican opponents of Obamacare launched the term “death signs”? Well, a real-world definition is an American health care system that has long denied health insurance due to pre-existing conditions.

Every year, brave American soldiers and first responders die to protect innocent civilians. Our government also pays for public safety as a fundamental responsibility. So why do some people now believe that the government has gone too far to save the lives of the many Americans who die each year from lack of health insurance?

In his column, Robert Frank made it clear why everyone, through Obamacare’s individual mandate, should pay an affordable amount to avoid adverse selection and finally enable a fully accessible private health insurance market. Republicans should focus on improving the profitability of America’s health care system rather than continuing the old ways.

MARGARET MORTZ

Spokane Valley, Washington, August 4


Martin E. Berry

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