Conservatives See the Light on High Deductibles

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

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