Healthcare Reform and Rational Ignorance

This recent article from Politico describes the beginning of the implementation of the Affordable Healthcare Act in Kentucky. The state has developed their own program called Kynect, and recently set up an information booth at the state fair to inform citizens of upcoming changes and answer questions. However, the article tellingly highlights how little the people of Kentucky actually know about the details of the new health care plan. Rational ignorance can clearly explain this. The Affordable Healthcare Act is very complicated to understand and taking the time to read the extensive bill has very high opportunity costs. The marginal benefit of a better understanding of the new health care system is much less than the marginal cost of taking the time and effort to decipher the plan. Therefore, most people are rational in their decision to remain ignorant about the specifics of the new law.

As the article describes, Kynect is working to inform citizens about the health care law’s implications for their lives. Events like the one at the state fair are intentional efforts to combat rational ignorance. Still, as is described in the Politico piece, much work remains to be done. A recent survey quoted in the article from the Kaiser Family Foundation “found that 44 percent of those surveyed weren’t even sure if the law was still on the books — many thought it had been repealed or tossed out by the Supreme Court.”