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The first of my two-part interview with Cornell professor John Cawley can be read here. The second should be coming soon. The most interesting thing about the interviews are the two questions that we did not answer, for various reasons. I reproduce them below.

  1. How can you square the strong agreement to the question about insurance markets suffering from adverse selection (i.e. healthy people select not to purchase insurance, leaving insurance pools with large numbers of unhealthy, high-cost, patients) with the oft-levelled claim that insurance companies cherry-pick the healthiest customers to insure?

    In other words, how can it be that both only the healthiest individuals and the least healthy individuals are the insured?

  2. It seems to me an inconsistent position for economists to solidly agree that employer-provided health benefits are “paid-for” by employees through lower wages, but to also be divided on whether the U.S. should continue its favored tax-treatment for employer-sponsored health insurance. To what might you attribute this difference?

    In other words, how can economists agree that when employees are provided with health insurance from their employers, their employers reduce the wages of employees to “pay for it”, and at the same time be worried about eliminating the tax preference for employer provided health insurance – eliminating the tax preference, and therefore having individuals purchase their own or through a group at their employer, will result in higher wages for employees.

The answers to these are messy, and perhaps politically unpalatable.

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