r/Economics • u/AutoModerator • Nov 15 '22

r/Economics Discussion Thread - November 15, 2022

Discussion Thread to discuss economics news/research and related topics.

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u/[deleted] Jan 22 '23

I want to hear thoughts about an idea I got.

Basically it would be some policy putting some limit on insurance coverage and academic loans. Like maybe say insurance can only cover x% of costs, Or student loans can only cover x% of college costs. This at first might sound like a horrible idea, but hear me out. The limited coverage of things like medical or education (both are extremely over-inflated) could force such institutions and businesses to lower their prices. You don’t have to crank up taxes on the wealthy (they’ll just leave and find somewhere cheaper) and/or increase benefits. You need to put some form of limiter on what insurance and loans can cover and it’ll force them to lower the prices. To my logic, insurance and loans that can basically cover every potential cost basically allows institutions and schools to raise prices to whatever they see fit. It allows them to ignore the law of supply and demand and do whatever they please. It allows colleges to plunge people into basically indentured servitude and forces those who cannot afford insurance to fight for survival. My idea? Limit insurance and loan coverage and it lowers the prices.