Keeping Health Insurance Affordable

Published: April 25, 2018

Preventing insurers from pricing premiums based on risk unintentionally increases costs for everyone else in the marketplace. When healthy people refuse to purchase health insurance due to higher costs, it causes insurers to raise prices even further, further disrupting those who are left in the market. The solution is to provide higher-cost individuals with direct subsidies based on their financial needs, allowing healthy people to stay in the market, lowering overall prices, and providing opportunity for sick people to purchase healthcare at rates they can afford.

Discussion Questions

1. Do we have a moral obligation to provide health insurance to everyone in America? What are the possible limits?
2. How should the added cost to the government be financed?

Additional Resources

• Read "Healthy, Wealthy, and Wise: 5 Steps to a Better Healthy Care System” by John F. Cogan, R. Glenn Hubbard, and Daniel P. Kessler.
• Read "A Policy Too Far” by George P. Shultz, Scott W. Atlas, and John F. Cogan. 
• Read John Cogan's book "The High Cost of Good Intentions: A History of U.S. Federal Entitlement Programs” to learn more about the federal program.
• Listen as John Cogan talks with EconTalk host Russ Roberts about Cogan's book, “The High Cost of Good Intentions,” available here.