Tuesday, December 15, 2009

Are they inconsistent? 

I have made the increased economic literacy of adults my new cause. As evidence that there's demand for what I want to do I add this from Victor Fuchs:

My reading of the replies leads to the following conclusion: Despite all the media coverage (or maybe because of it), most of the public has a very limited understanding of the health care system and health policy. They think the insurance companies are the main problem. They think an employer mandate is a good idea because employers pay for care. They want to control cost, but oppose every policy that might do that except for thinking that drug company and insurance company profits are too high. They say they want everyone to have access to care but only one in four favors an individual mandate.

Why is the public�s understanding so limited?

I don't really follow why wanting access to care necessarily leads to favoring individual mandates, but the rest of it is rather consistent with the view that people don't get economics well. H/T: Bryan Caplan, whose writings have helped me come to decide this should be a cause we support, and who calls normal voters both economically illiterate and childish. If I can fix the former, I think the latter cares to itself.

Caplan also notes a poll question, "If the government makes these changes to health insurance [i.e., extending coverage], would that probably cause you to pay more, less, or the same amount for your own health care?"
And that comes as a result of the individual mandate. As of the moment, the latest CBO numbers indicate that in the individual market (about 33 million people) average premiums go up; those below twice the federal poverty level get a subsidy that brings down the number below what they had before. For those in employer groups (159 million) on average the benefits stay the same, but there could be substantial variation says CBO. (Thanks to Gary for the link.) CBO still insists that any cost-shifting that occurs with Medicare cuts gets offset by scale economies from more standardized policies (meaning, you don't get to choose which benefits you get as much as you used to) and fewer uninsured. That isn't impossible, but it's arguable and offered without much evidence.

Should voters care about other people's costs rather than their own? And how would improving people's understanding of health care policy improve public attitudes? Is it the job of economic education to soften these people up for a greater public role in health care?

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