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After the ACA: Freeing the Market for Health Care

28 Pages Posted: 7 Feb 2013  

John H. Cochrane

Hoover Institution; National Bureau of Economic Research (NBER); University of Chicago - Booth School of Business

Date Written: February 6, 2013

Abstract

I survey the supply, demand, and market for health care and health insurance. I conclude that a much less regulated system is possible, and necessary. Cost control and technology improvement must come from disruptive competition from new suppliers, as it has in airlines, retail, internet, and other successful industries. People must direct their expenditures at the margin, and feel the benefits and costs of their decisions. Individual, portable, guaranteed renewable insurance can then emerge, addressing the pathologies of today’s insurance markets. I discuss how current law and regulations rather than fundamental market failures are the main reasons a healthy market does not emerge, and why a regulatory approach must fail. I address common objections to market-based health care and insurance.

Keywords: health economics, health insurance, ACA

JEL Classification: I11, I18

Suggested Citation

Cochrane, John H., After the ACA: Freeing the Market for Health Care (February 6, 2013). Available at SSRN: https://ssrn.com/abstract=2213027 or http://dx.doi.org/10.2139/ssrn.2213027

John H. Cochrane (Contact Author)

Hoover Institution ( email )

Stanford, CA 94305-6010
United States
6507236708 (Phone)

HOME PAGE: http://faculty.chicagobooth.edu/john.cochrane/index.htm

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-702-0458 (Fax)

HOME PAGE: http://faculty.chicagobooth.edu/john.cochrane/research/Papers/

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