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Health care law on line at U.S. Supreme Court, but is it likely to fall?

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By JESSICA GRESKO and MARK SHERMAN

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Learn how insurance works and understand the concept of "adverse selection". Without a legal requirement to carry insurance, actuarial considerations will drive out the sickest and healthiest people from the insurance pool, raising costs for those who remain. As the size of the pool of insured is reduced, premiums rise, chasing out more healthy people and more of the sickest. Adverse selection can be a downward spiral that leaves a great many without insurance, and thus without access to routine preventative health care.

As an economist I can tell you the concern among economist when in 1980 INA bought doctor owned Ross Loos Medical Group, one of the few pre-paid health plans in the US at the time. The other was Kaiser. Both were centered in Southern California. Ross Loos was the first and was owned by the doctors, not by an insurance company. Economists feared that the insurance model would leave about 30% or more of Americans without access to routine health care. That is scary from an economic growth and standard of living point of view. A government has to do three things and do them well to grow its economy and prosper. Those three things are education, infrastructure and health care. These are fundamental to prosperity. High worker productivity is what drives a high standard of living. People who miss work frequently due to illness or who must work through untreated diseases and untreated disabilities are not productive workers. Workers who die early due to preventable conditions likewise reduce their lifetime productivity. All of these cut into the overall productivity of the workforce and thus reduce the nations standard of living. Overall wealth, happiness and longevity all suffer when health care isn't readily available and high quality.

With auto insurance you must carry insurance to legally drive. Likewise when you buy a home your pay for homeowners insurance as part of your mortgage. These requirements act to prevent adverse selection in those markets. But in the US adverse selection is very much a problem in the health insurance market as rising prices price more employers and individuals out of the insurance market. The requirement to buy insurance was placed there to ensure everyone participated in the market and thus prices could be kept lower. It is still a valid requirement. If you look at the Swiss model, they have the same requirement of their citizens. They are one of the few developed nations that do not have a single payer system and instead rely on private insurance to fund health care. Their costs, btw, are second only to those of the US, far higher than any of their European neighbors or that of Japan, South Korea and Taiwan.

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It is not "Obama Care". It is IRS Care. I was unemployed and did not need to file an income tax return. So when I was asked if I would be filing a return I stated "No. That I had no income to report." Not filing denied me healthcare. I appealed and lost. I did claim that it was IRS Care and they had no governance in regulating my healthcare needs.

The real kicker is that 1.2 million applicants lied about filing a tax return and got healthcare.

Truth zero, liars healthcare... Only in America.

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The real kicker is that 1.2 million applicants lied about filing a tax return and got healthcare.

Or they filed as required by the provisions of the ACA and reported no income. It has never been a secret that regardless of income or lack thereof, one must file a Federal tax return in order to qualify for the advanced payments made under the Premium Tax Credit for those who purchased plans in their respective state Marketplaces. That you failed is no reflection on the program. You just didn't read and understand the rules.

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