Obamacare is failing. Several studies have found that government health-insurance subsidies, including those at the heart of the Obamacare exchanges and Medicaid (which Obamacare dramatically expanded), produce large, negative rates of return. In most cases, recipients of the subsidy value it at less than half of what it cost taxpayers to finance. These big, bureaucratic programs don’t maximize patients’ welfare, and they waste taxpayers’ money.
They need to be reformed. But, starting with Obamacare’s exchanges, how? How might its subsidies be restructured to improve overall outcomes for patients, without increasing costs to taxpayers?
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