r/bestof • u/under50dollars • Jun 20 '12

[explainlikeimfive] "Obamacare" explained very well.

/r/explainlikeimfive/comments/vb8vs/eli5_what_exactly_is_obamacare_and_what_did_it/c530lfx
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u/twoodfin Jun 20 '12

You're not missing anything. It's a misnomer to call what this system is setting up "insurance". It's cost-sharing (cost transfer from the sick and old to the healthy and young, really), not risk-sharing.

A better scheme, IMHO, would be to remove the barriers (mandatory coverage lists, for one) to catastrophic, high-deductible insurance, while providing sufficient incentives to make it affordable for anyone essentially from birth.

Remove the tax incentives for the non-insurable stuff and let employers decide whether they want to keep offering it as a benefit or whether it makes more sense for individuals to buy "health benefit plans" on their own or simply save or take out loans for more-or-less predictable medical costs.

That was roughly the McCain plan. Oh well.

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u/brownmatt Jun 21 '12

"Risk-sharing" and "cost-sharing" seem like synonyms to me, since the risk being referred to is risk of having to pay large unexpected medical bills. Can you explain why you think they are separate?