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The New Health Dialogue

A Blog from New America's Health Policy Program

What do you get if you put two economists in a room?

Published:  December 1, 2011
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Three opinions. Right?

Well, apparently not--at least not on some issues. The University of Chicago's Institute on Global Markets has pulled together a panel of respected academic economists, and is asking them to agree or disagree with a series of policy-related statements. Watching the consensus (or lack thereof) is interesting on a variety of topics, but we found last week's statement particularly notable:

There are no consequential distortions created by the tax preference that favors obtaining health insurance through employers.

Obviously, we care because it's health-related, but the level of consensus is interesting as well. Contrary to the common perception of economists as constantly disagreeing with each other, 95% of economists surveyed either disagreed or strongly disagreed with the proposition. Taking their confidence in their answers into account, 97% disagreed (63% strongly).

The poll doesn't ask whether the employer-sponsored system, or even the tax preference, is a good thing--it only asks if it creates distortions. On that, the near-unanimity sends a strong messge: both labor markets and health care markets are affected by the subsidy. It keeps people pinned to jobs that they'd prefer to leave, and induces over-insurance and over-consumption of health care. Addressing that overconsumption--and the incentives that create it--is critical to bringing down our long-term health costs.

Thanks to Jodi Beggs of Economists Do It With Models for the tip on the IGM Forum.

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