Question

In: Economics

Part of the ACA included a provision for an individual mandate, meaning that most individuals in...

Part of the ACA included a provision for an individual mandate, meaning that most individuals in the US would be required to have health insurance or seek an exemption. Prior to this mandate, who do you think was most likely to purchase health insurance? Explain.

Solutions

Expert Solution

The people with any pre-existing medical history are more likely to purchase health insurance. As per the mandate, every person has to take a medical insurance irrespective of his or her medical condition. This will force the healthy people who have a less chance to fall ill, to take a medical insurance. The people who believe that they are less likely to need any medical care are less likely to take any insurance for it.

On the other hand, the people who believe they can fall ill i.e. have any medical history will surely take a medical insurance because they know that they might fall ill and need that insurance. So, when it was not mandatory to take a medical insurance the people who have more chance to fall ill will take medical insurance.


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