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Dr. Carson’s ‘insurance death spiral’

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Vicious Circle by Jacek Malczewski,  in the National Museum, Poznań, Poland.

Modern Healthcare’s Harris Meyer looks at Dr. Ben Carson’s healthcare-reform proposals and finds it shows that the retired pediatric surgeon doesn’t understand the economics of health insurance.

The core of Dr. Carson’s proposal is make heath savings accounts available to everyone, with the idea, he says, of weaning people off the government “dependency” involved in the Medicaid and Medicare programs.

He  does say that people could stick with those programs if they wanted.

But the trouble is, says Mr. Meyer, imaking Medicare and Medicaid voluntary  could “unravel the insurance risk pool in the same way that proposals to make Social Security voluntary would unravel the retirement safety net. ”

“Younger, healthier and more affluent Americans could take Carson’s government-provided HSA money and combine it with their own funds to buy comprehensive health insurance plans or pay for their own care out of pocket. But older, sicker and poorer Americans who wanted to stay in a government health insurance program would have to pay much higher premiums and likely accept less-comprehensive benefits because the safer insurance risks had exited the program.

“Actuaries call that an insurance death spiral. That apparently lies outside Dr. Carson’s medical expertise.”

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