Forcing uninsured people to buy health insurance will not necessarily be good for them.
Isaac Ehrlich and Yong Yin, economists at the State University of New York at Buffalo, make that argument in a paper published behind a paywall by the National Bureau of Economic Research.
Ehrlich and Yin say economists who are trying to analyze the effects of Patient Protection and Affordable Care Act (PPACA) insurance provisions should pay more attention to the value of self-insurance and self-protection” (SISP) efforts.
Ignoring SISP effects may make PPACA seem to be better for uninsured people than it really will be, the economists contend.
Ehrlich and Yin define “self-insurance” as being “actions people take to reduce their potential loss from the occurrence of specific hazards.” Those actions could include investing in medical knowledge, monitoring one’s own health, using medical savings accounts, and depending on charities to help provide care for the poor.
In the area of health care, “self-protection” – actions designed to keep losses from occurring in the first place – could include eating well and exercising, the economists say.
The economists note that PPACA includes a new tax on people who fail to have a minimum level of health coverage.