Monday, November 9, 2009

Feldstein on incentives in health insurance reform

Martin Feldstein weighs in on the potential for shenanigans by profit-maximizing individuals faced with the proposed new health insurance system. He thinks they're likely, because the penalties are so low relative to the gains of not purchasing health insurance, which presumably would no longer be penalized by denied coverage (for pre-existing conditions).

Economists are paranoid, aren't we? But you can't argue with the numbers.