The incidence of the ACA mandates

Here is Mark Pauly, with Adam Leive and Scott Harrington (NBER), this is part of the abstract:

We find that the average financial burden will increase for all income levels once insured. Subsidy-eligible persons with incomes below 250 percent of the poverty threshold likely experience welfare improvements that offset the higher financial burden, depending on assumptions about risk aversion and the value of additional consumption of medical care. However, even under the most optimistic assumptions, close to half of the formerly uninsured (especially those with higher incomes) experience both higher financial burden and lower estimated welfare; indicating a positive “price of responsibility” for complying with the individual mandate. The percentage of the sample with estimated welfare increases is close to matching observed take-up rates by the previously uninsured in the exchanges.

I’ve read so many blog posts taking victory laps on Obamacare, but surely something is wrong when our most scientific study of the question rather effortlessly coughs up phrases such as “but most uninsured will lose” and also “Average welfare for the uninsured population would be estimated to decline after the ACA if all members of that population obtained coverage.”  The simple point is that people still have to pay some part of the cost for this health insurance and a) they were getting some health care to begin with, and b) the value of the policy to them is often worth less than its subsidized price.

You will note that unlike say the calculation of the multiplier in macroeconomics, the exercises in this paper are relatively straightforward.  They also show that people exhibit a fairly high degree of economic rationality when it comes to who signs up and who does not.

It has become clearer what has happened: members of various upper classes have achieved some notion of “universal [near universal] coverage,” while insulating their own medical care from most of the costs of this advance.  Those costs largely have been placed on the welfare of…the other members of the previously uninsured.  So we’ve moved from being a country which doesn’t care so much about its uninsured to being…a country which doesn’t care so much about its (previously) uninsured.  I guess countries just don’t change that rapidly, do they?

I fully understand that Obamacare has survived the ravages of the Republican Party, and it was barely attacked in the recent series of debates, and thus it is permanently ensconced, and that no better politically feasible alternative has been proposed.  At this point, the best thing to do is to improve it from within.  Still, there are good reasons why it will never be so incredibly popular.