Obamacare Case Study

I think this case study does a good job at presenting the main economic arguments for and against the Affordable Care Act/Obamacare – whose intention was to provide (nearly) universal health coverage. As the case study discusses, the private markets for health insurance coverage are plagued by many market failures including externalities, adverse selection, moral hazard and missing credit markets. While these market failures contribute to many of the faults in the American system of health insurance, the cost of providing universal health care is substantial and changing the system may reduce the level of innovation achieved by private sector healthcare firms.

Your 500 words analysis of the case study entitled “Obamacare“ should address the following issues/questions. Using details from the case study, …

(1) How does the structure of Obamacare attempt to address the market failures discussed above and explain the success and limitations of this structure?

(2) How does Obamacare attempt to address equity concerns? In this case, do you think there is a tradeoff between equity and efficiency? Explain.

Along with the economic tradeoffs, this case study also discusses the Supreme Court’s decision on whether the individual mandate in Obamacare was constitutional. While Chief Justice Roberts’ majority opinion is interesting and well worth a read, I would like your writeup to focus on the economic issues and not the proper “role of the state”.