As per the article by Bernard Siegel, the decisions to whether to buy a health insurance or not have been the subject of debate among people. Here, affordability is said to play a vital making choices. As such, many young people tend to weigh their budgets against the risks involved. The risks (chance of incurring medical costs of at least $ 27000 by 2011) attributed to the young people (25-34 years) is estimated to be about 5%. About 6 million people are anticipated to pay the penalty for not buying a health insurance policy, which will increase proportionately with an individual’s adjusted gross income. The person will be required to pay (whichever is more) a penalty of $ 95 or 1% of his or her income that exceeds the FIT filing threshold of $10,150. Moreover, the amount of the penalties per adult will continue to increase until it heats $ 695 or 2.5% of income in 2016 (Bernard F7).
In spite of the existence of situations where uninsured young person may pay less, Bernard Siegel, generally, argues that the cost of buying a health insurance plan is relatively lower than the medical costs of buying one. His arguments are premised on the Medical Expenditure Panel Survey, which reveals the total outlay for uninsured man living in New York as being about $5,290. This figure precisely relatively higher than the total cost of the silver plan ($ 4311) and out of pocket costs ($ 821). In addition, the total outlay of $5,290 is higher than the catastrophic plan in New York that costs about $4,940 (Bernard F7). The author argues that carrying a cost benefit analysis of the costs and risks associated with buying or not buying a health insurance may bring unrealistic results, which are not scientifically rational. As such, most individuals have reasons for the decisions they take. Some will buy it if they consider it as an affordable option while others are ready to pay the penalty and take hold of their chances.
Owing to the article, it is clear that the author largely supports the need for individuals to take health insurance plans instead of waiting to pay for the penalty for not buying a policy. To a large extent, I do agree with the author’s argument. It is true that some parts of the country, the medical costs that may be incurred by uninsured persons are too high compared with the cash outlay, which a person can incur by paying insurance premiums under both the typical silver plan and catastrophic plan. However, his conclusion is premised on mere monetary values rather than incorporating both monetary and non-monetary value of the both choices.
Economic resources are often scarce in supply; our lives always involve making critical choices (McEachern 17). However, it should be noted that there are consequences of the choice that individuals make. Here, each choice an individual make are arguably coupled with an opportunity cost, which is the cost of an alternative (option) that must be forgone to pave the way for the pursuance of a particular action (Rus 80). Putting our situation in the right economic context, it can be argued that whether an individual opt to buy the health insurance plan or pay the penalty and take his chances, there will always be a cost for not taking the next available choice.
In general, an opportunity cost is an inevitable phenomenon. This implies that economic agents cannot eliminate such costs but rather reduce them. As per the article, the author tends to rule out the use of Cost Benefit Analysis (CBA) in weighing the costs and risks, and the benefits associated with going without a health insurance plan. However, in my view, CBA should be an essential ingredient in making such choices since it can be used to reduce opportunity costs attributed to economic choices that an individual makes. Here, people need to weight the economic benefits and costs of buying an insurance plan, and compare them with the benefits and costs of not buying such a policy. In this case, one should choose the option with higher net benefits (benefits-costs). However, it should be noted that when making rational CBA, individuals should take into account both monetary and non-monetary benefits and costs that can be attributed to each available option.
Bernard, Siegel. “Weighing the Risks of Going Without Health Insurance”. The New York Times 20 November 2013. F7. Print.
McEachern, William A. Macroeconomics: A Contemporary Introduction. Mason, Ohio: South-Western, 2013. Print.
Rus, Ginés . Introduction to Cost-Benefit Analysis: Looking for Reasonable Shortcuts. Cheltenham, Glos, UK: Edward Elgar, $c c2010, 2010. Print.