Polarisation and public policy: political adverse selection under Obamacare

Bursztyn, Leonardo, Kolstad, Jonathan T., Rao, Aakaash, Tebaldi, Pietro and Yuchtman, Noam ORCID: 0009-0003-6501-9618 (2025) Polarisation and public policy: political adverse selection under Obamacare. The Economic Journal. ISSN 0013-0133 (In Press)

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Abstract

Politicising policies designed to address market failures can diminish their effectiveness. We document a pattern of “political adverse selection” in the health insurance exchanges established under the Affordable Care Act (colloquially, “Obamacare”): Republicans enrolled at lower rates than Democrats and independents, a gap driven by healthier Republicans. This selection raised public subsidy spending by approximately $155 per enrollee annually (3.2% of average cost). We fielded a survey to show that this selection does not exist for other insurance products. Lower enrolment and higher costs are concentrated in more Republican areas, potentially contributing to polarised views of the policy.

Item Type:	Article
Additional Information:	© 2025 The Author(s)
Divisions:	Management
Subjects:	J Political Science R Medicine > RA Public aspects of medicine > RA0421 Public health. Hygiene. Preventive Medicine
Date Deposited:	03 Sep 2025 11:12
Last Modified:	03 Sep 2025 11:12
URI:	http://eprints.lse.ac.uk/id/eprint/129368

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