The invaluable Megan McArdle is back from her honeymoon and blogging up a storm over at The Atlantic. Her latest is on health insurance, in which she notes that one of the problems with the Massachusetts system and with Obamacare is that “it’s not enough to have a mandate; unless the penalty costs at least as much as buying insurance, people will game the system by dropping coverage, and then buying it when they need something done.”
In other words, non-sick people will pay a small penalty, say $600, to avoid buying a health insurance policy that might cost, say, $7,000, and then if they get sick will sign up for a policy at a premium cost that doesn’t reflect their now preexisting condition. The result is that insurance will cost more—possibly a whole lot more—for people who maintain it.
