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Conservatives See the Light on High Deductibles

Dec. 18 (Bloomberg) -- The revelation that many plans in the Patient Protection and Affordable Care Act’s health insurance exchanges have high deductibles has put many of the law’s conservative opponents into a corner: Once in favor of high deductibles, these critics of Obamacare are suddenly worried about the risk to consumers. The data show why their new position makes more sense.

In economics, the principle of moral hazard holds that people who have insurance that is too comprehensive tend to spend more than they should, because they’re protected from the cost of their actions. Many people, especially conservatives, believe that reversing the moral hazard can reduce health spending, because increased exposure to cost will make consumers more discriminating.