Austrian economist Bob Wenzel explains. (bold emphasis mine)
It's clear that, under Obamacare, premiums will go through the roof, especially for the young. It will be cheaper for almost everyone to pay the penalty rather than buy insurance. And since, Obamacare requires that insurers take on those who already have pre-existing conditions, there is no risk for those who simply pay the penalty. If a penalty payer comes down with a catastrophic condition, he can simply buy "insurance" at that point.
This will eventually collapse the system, unless penalties are made higher than the cost of insurance (which would require congressional approval--imagine that circus).
Well stated by both authors! The whole premises of CommieCare, is based on economic transfers rather than market efficiency and hence will either collapses or require further subsidies...
ReplyDeleteAs Uncle Milton said, there is no free lunch unless it is stolen or paid for be someone else..