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You are here: Home / Anderson On Health Insurance / Policy design and allowable errors

Policy design and allowable errors

by David Anderson|  July 15, 20241:40 pm| 8 Comments

This post is in: Anderson On Health Insurance

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I need a break from updating my dissertation and battling with the formatting gods, so I want to talk about allowable and preferrable errors in the context of policy design.

Everything that is measured by humans will have some degree of error to it.  When we design policies, we really want to be deliberate about what type of error we want to be concerned about.  When we test for cancer, we really want to be confident that we’re not missing people who have cancer by telling them that they’re OKAY when they are not.  We’re okay, at the screening stage at least, to use tests that are really good at identifying people who have cancer signs but aren’t particularly good at only picking those folks out of a crowd.  Cancer screening routinely identifies a substantial number of individuals who don’t have cancer for further investigation.   We make a decision that we would much rather see false positives than false negatives.  We’re okay with that error.  We would love a cheap test that is 100% sensitive and 100% specific but those things rarely exist.

The ACA relies on estimates of future income to determine subsidy levels and eligibility.  If there is a gross error, the IRS will claw back excess subsidies in the next tax year.  Under the Biden Administration, there has been a decision to welcome errors that lead to more federal spending and more people insured at higher levels of coverage.  Under the Trump Administration, there was a decision to welcome errors that drove down federal spending and led to fewer people being enrolled.

Every policy that requires measurement of some sort will have some error.  A key policy decision is deciding what type of error is more preferred or less preferred.

 

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Reader Interactions

8Comments

  1. 1.

    scav

    July 15, 2024 at 1:49 pm

    Ah!  I see ABL (All But Library) is still a bloody minefield.  Good luck with it!

    And many thanks for the short-form reminder.  Err on the side of kindness.

  2. 2.

    Manyakitty

    July 15, 2024 at 2:10 pm

    Let me take this opportunity to share my hearty congratulations on completing your PhD. Way to go!!!!

  3. 3.

    artem1s

    July 15, 2024 at 2:20 pm

    Everything that is measured by humans will have some degree of error to it.

    sounds like a good idea to consider when looking at any legislation. every administration will decide how they want to interpret and implement. if these decision are constantly under flux it’s going to take longer for the legislation to impact people. i.e. infrastructure doesn’t happen in a week and sometimes takes multiple terms to take hold. thank the FSM that Dems in Congress kept pushing back on multiple attempts to replace and/or kill ACA. The longer it lasts the more the general population see it as ‘their healthcare’ that someone is messing with.

  4. 4.

    Shana

    July 15, 2024 at 2:48 pm

    Two years ago my mammogram showed a “weird mass”  that they didn’t think was cancer but they wanted to do further tests. I was completely fine with that and happily went for additional tests. Turned out I has cancer in both breasts hand lumpectomies and am cancer free now.

  5. 5.

    LanceThruster

    July 15, 2024 at 2:57 pm

    Or… #M4ANOW. Dems are championing RomneyCare.

  6. 6.

    Lobo

    July 15, 2024 at 3:31 pm

    In other words do you presume waste and increase administrative friction or presume need and reduce the friction.

    Guess which party presumes what in policy?

  7. 7.

    David Anderson

    July 15, 2024 at 4:29 pm

    @LanceThruster: 218-51-1-5

  8. 8.

    AJ of the Mustard Search and Rescue Team

    July 15, 2024 at 7:00 pm

    Shouldn’t we style you as D. A. PhD now David?

     

    Congrats again, big milestone 👍🏻

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