{"id":327,"date":"2013-09-23T13:39:44","date_gmt":"2013-09-23T17:39:44","guid":{"rendered":"http:\/\/nm.cms-devl.bu.edu\/everett\/?page_id=327"},"modified":"2014-08-06T10:06:40","modified_gmt":"2014-08-06T14:06:40","slug":"health-care-death-spiral","status":"publish","type":"page","link":"https:\/\/www.bu.edu\/questrom-magazine\/fall13\/health-care-death-spiral\/","title":{"rendered":"Health Care \u201cDeath Spiral\u201d"},"content":{"rendered":"<p><strong>In January 2014<\/strong>, the political posturing over the new health care law in the United States will all be academic\u2014states will have to offer a marketplace for buying insurance. One of the most controversial aspects of these American Health Benefit Exchanges is the mandate for a minimum level of coverage.<\/p>\n<p>A National Bureau of Economic Research study, coauthored by Keith M. Marzilli Ericson, assistant professor of markets, public policy, and law, found that purchasing mandates can be essential to the functioning of the entire market. Using data from trendsetting Massachusetts, which has had a mandate since 2006, Ericson concluded that if the requirement to buy is removed, markets can unravel. If consumers are allowed to opt out, the most price-sensitive consumers\u2014the young and healthy\u2014will bail out. As these consumers leave, the less price-sensitive consumers\u2014who tend to be both older and have higher health costs\u2014are stuck in the market, which, in turn, leads to higher markups. If enough people are willing to drop out of the market altogether, the authors note, \u201ca death spiral effect in which all price-sensitive consumers exit the market\u201d can occur.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In January 2014, the political posturing over the new health care law in the United States will all be academic\u2014states will have to offer a marketplace for buying insurance. One of the most controversial aspects of these American Health Benefit Exchanges is the mandate for a minimum level of coverage. A National Bureau of Economic [&hellip;]<\/p>\n","protected":false},"author":2184,"featured_media":0,"parent":26,"menu_order":21,"comment_status":"closed","ping_status":"closed","template":"story.php","meta":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v19.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Health Care \u201cDeath Spiral\u201d - Questrom Magazine<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.bu.edu\/questrom-magazine\/fall13\/health-care-death-spiral\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Health Care \u201cDeath Spiral\u201d - Questrom Magazine\" \/>\n<meta property=\"og:description\" content=\"In January 2014, the political posturing over the new health care law in the United States will all be academic\u2014states will have to offer a marketplace for buying insurance. 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