Bryan Caplan  

Does the Public Get This Right?

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There is one question in the Roper-AP survey where I wonder if the American public is more perceptive than pro-Obama economists.  The question:

"If the government makes these changes to health insurance [i.e., extending coverage], would that probably cause you to pay more, less, or the same amount for your own health care?"

The answers:

Pay a lot more - 29%
Pay a little more - 20%
Not change the amount - 32%
Pay a little less - 7%
Pay a lot less - 5%

Remember - the question asks people about their own costs.  So would pro-Obama economists disagree?  Or would they privately accept with these numbers - or even call them optimistic?  Non-economists probably interpret this question distributionally, but economists of all political persuasions would hopefully also consider the effect on the overall rate of growth of medical spending.


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COMMENTS (5 to date)
fundamentalist writes:

It's not possible that the public gets it right. They're irrational, remember?

Econidiot writes:

If you ask the general public, though, they will also tell you that their employer pays for their health insurance. I am constantly mystified that most folks (even some that I normally consider intelligent) can't understand that they are actually paying for it now.

Ryan Vann writes:

Econidiot,

Seems you are simply splitting hairs. I understand what you are implying, that healthcare benefits are a wage tradeoff, but it is still a technicality. In a practical sense, both wages and health insurance are paid by the employer. Would it make sense to say the wages you get aren't really paid for by the employer, but that you are actually paying yourself?

This is essentially what your argument amounts to.

Fundamentalist,

Are they rationally irrational, or just irrational? Is it possible to be irrationally rational (I hate to use the analogy, but think the Vulcans from Star Trek) ?

steve writes:

Looks about right. Although I guess that depends on how you're phrasing your question. I understand it as, "If gov't makes proposed changes, what I pay for my own healthcare (which I would take to include anything I pay in tax-wise for healthcare [indirect] + out of pocket expenses for healthcare [direct]) will go:

About half of people will probably end up paying more. That 29% that thinks they'll pay alot more are people who are healthy and working...they'll pay a sizeable sum in extra taxes, while not consuming much if any more healthcare, so their expenses will go up.

The rest, well, if you don't pay much or anything as it is, that's probably not going to change.

It looks like the public is already intuitively aware of what policy makers miss. A small portion of the population consumes a large, disporprtionate amount of healthcare dollars. The vast majority of the expenses incurred by this costly minority are for lifestyle (i.e. - avoidable) conditions - diabetes, smoking related illness, drug and alcohol related illness, injuries related to trauma (bar fights, motorcycle crashes, etc). They can call it whatever they want, but it's socialized the consequences of stupid actions. Responsible society gets to pay for the reckless behaviour of the few.

Nothing in any of the current bills does anything substantial to curb utilization, or address the issue of an unsavory few at the long tail of the health-expenditure curve who ultimately screw the rest of us.

Doug writes:

When people are in the market for a new job, voluntarily or otherwise, they understand compensation trade-offs very well. Comments like "That job would give me more pay but my current insurance package is so much better," are common. It's mystifying that they seem to forget them so quickly once they land a new position.

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