Economists Take on the US Health Care System

A survey was conducted by three health researchers of Cornell University, Texas A&M University, and Indiana University in 2018 in which nearly 200 health economists were asked, how they would shape the U.S. health care system. A majority of the economists surveyed said they would keep the Affordable Care Act in place, with 89% opposing the repeal of the ACA. Around 81% of the economists also believed that for the success of the ACA law, the individual mandate was essential. They argued that without the mandate, enrollees with good health would leave the ACA’s exchanges resulting in a sicker risk pool and will also make health insurance more expensive.

Most economists were also in favor to keep the ACA’s protections for people with pre-existing conditions. Though, 80% said that premiums should be high for people having genetic defects. Around 70% of the economists were in favor of charging higher premiums from people engaged in unhealthy behaviors like smoking. However, some of the members of other disciplines considered it differently arguing that addictions are not choices but diseases. However, as per Michael Stein, chair of the health law, policy, and management department at Boston University, Adult addiction to nicotine generally results from decisions made in teen, which are usually shaped more due to circumstances rather than rational thought and so, charging a higher premium from a smoker is like punishing someone with a disease.

Most of the economists who were surveyed opposed changes to Medicare and Medicaid that  they were asked about. For example, 71% of the economists were opposing the idea of basing Medicare eligibility on income instead of age. besides, 61% of the surveyed economists were not in favor to convert Medicare to a voucher-based system, where the government would pay a specific amount for health coverage so people could shop for different health plans. Nevertheless, several economists favor raising the Medicare eligibility age and about half of them rejected the proposal. 28% were in favor to raise the eligibility age and 22% economists gave no opinion on it.

Though health economists recognize the free market value, they also believe that market failures are harmful. In cases like elderly health insurance, the majority of economists have the opinion that society does best when the government directly provides services. Meanwhile over half of the economists were in favor to raise taxes to increase Medicare finances. The economists were asked about their opinion that whether they favored Medicaid work requirements that have been proposed or implemented in 16 states till the summer of 2019. About 77% of the economists did not favor the plans and about 70% of the economists opposed Medicaid block grants that would provide a set amount of money for Medicaid in place of open-ended  funding.

Even the current tax exemption for employer-sponsored health plans was opposed by the majority of the economists, as just 14% favored the current tax structure. Some economists believed that the tax break can result in overly generous health plans thereby leading to wasteful healthcare spending. In addition to this, half of the economists did not approve of the statement that drug company profits are essential to incentivize research and development. Around 28% were in favor of this statement and 24% gave no opinion on it.

Thus, it can be concluded that if health economists were in charge of the health system then not something big would change, besides some notable exceptions like Medicaid would not have work requirements and taxes would go up for Medicare and an employer-sponsored health plan.

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