Working Paper: NBER ID: w14545
Authors: Sherry A. Glied
Abstract: This paper examines the economic rationale of affordability exemptions in the context of a health insurance mandate. On its face, an affordability exemption makes little sense-- it exempts people from purchasing a good that policymakers believe benefits them. I provide an economic definition of affordability and discuss how it is implemented in the contexts of food, housing, and health care. Affordability standards are frequently used in food and housing policy making, but both empirically and theoretically health care operates quite differently than do these other merit goods. These differences help explain why the use of affordability in health policymaking is so different from its use in these other contexts. I conclude with a discussion of the relationship between mandates and exemptions in other health care systems.
Keywords: health care affordability; insurance mandates; economic rationale
JEL Codes: I18; I32; I38
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| affordability exemption in Massachusetts (G52) | individuals who cannot afford health insurance remain uninsured (I13) |
| lack of affordable coverage (G52) | increased out-of-pocket medical expenses for uninsured individuals (I13) |
| affordability exemption (G52) | higher rates of underconsumption of necessary health care services (I14) |
| affordability exemption (G52) | adverse effects on health care access and insurance market stability (G52) |
| lack of affordable coverage (G52) | individuals forego routine and preventive care due to cost concerns (I11) |