Older posts on Organizational Architecture

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Can you trust your financial advisor?

The Intelligent Investor. Is Your Broker Good or Bad?

Moral hazard and adverse selection at work in Obamacare

This article reports on some problems Obamacare is suffering: http://www.investors.com/politics/editorials/obamacare-suffers-three-major-blows-in-one-week/.

A money quote:
"Why will 2017 rates spike even higher? In addition to the cost of complying with ObamaCare’s insurance regulations and mandates, there’s the fact that the ObamaCare exchanges have failed to attract enough young and healthy people needed to keep premiums down. Plus, two industry bailout programs expire this year, Tavenner notes.

"Oh, and she admits that people are gaming ObamaCare just like critics said they would: buying coverage after they get sick — since insurance companies can no longer turn them down or charge them more — then dropping it when they’re done with treatments. 'That churn increases premiums. So you have to kind of price over that.'”

Moral Hazard and adverse selection in ObamaCare

"ObamaCare’s architecture also makes it economically rational for consumers to wait until they are about to incur major medical expenses to get covered, and administratively created “special enrollment periods” encourage such gaming.
"Oliver Wyman calculates that people who signed up during one of these windows—about one of five ObamaCare beneficiaries—are 10% more expensive than people who join during normal periods and 40% more likely to drop their plan later. Meanwhile, the nonprofit Blue Cross Blue Shield Association warned last month that new ObamaCare enrollees had medical costs 22% higher on average in 2015 than people with employment-based coverage."
http://www.wsj.com/articles/a-big-obamacare-exit-1461106087

Incentives in ObamaCare

http://time.com/4292290/how-obamacare-is-fueling-americas-opioid-epidemic/?xid=homepage