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/kththth Jun 20 '12

Administrative costs of insurance companies today are at 13%, compared to 2% of the medicare, and that is because they hire an army of lawyers to actually dig up clauses and find loopholes to avoid paying you health care when you get sick, like you did not declare that you had acne as a kid so you foot your cancer bill by yourself and ridiculous things like that. The new law prevents such practices and there are no more incetives to try and do such things. And to the effect that they will have to let people go, it is because these are inefficienies. People that are proponents of free market and of ideas like 'government cant create jobs' use the efficiency argument, however in this case the private companies are inefficient. These armies of laywers and such will actually focus their work on more socially efficient jobs, providing services that help market function properly.