Can we Nudge ourselves to reduced medical insurance premiums?

Today's NYT Upshot has good news about stable or even declining premiums available to individuals who enroll during the current ACA open enrollment period. However, author Margot Sanger-Katz notes that failing to actively shop and re-enroll could be costly for many:

History suggests that a lot of people will avoid shopping again and simply renew their old plans. That will be a mistake. Some will miss out on savings. Others may face miscalculations of their federal subsidies and a surprise bill come tax time.

 We are reading Nudge this week in my Econ 625 class. What would the authors of this book suggest as a better way of structuring the ACA re-enrollment process? One obvious change would be to force everyone to actively re-enroll every year "from scratch," by offering no time or effort saving for choosing the "same as before" option. This is probably much easier said than done.

James Watson's wisdom

I was sucked in to this excerpt (in MIT's Technology Review) from biologist James Watson's soon-to-be-published memoir, "Avoid Boring People." Watson's 5 lessons at the end are particularly stimulating. His assertion that science is best done in teams of no more than 2 is about increasing and diminishing returns: The marginal product of scientist #2 on a team is deemed to be much higher than the MP of scientist #1 acting alone, but beyond that do not go, sayeth Watson. I wonder how true this is today, or how surprised Watson might be by the hundreds of co-authors on the papers laying out the structure of the human genome. Then again, I wonder if Watson would consider the sequencing of the human genome to be science, or just "mopping up the details."

Opportunity cost strikes again, and again...

Today's ADN offers another episode in the continuing saga over allocation of federal transportation funds. At least one representative, Paul Seaton, is wondering why we have $70 million targeted for the Knik Arm and/or Gravina Island Bridges while the Cooper Landing bypass project is being effectively put on indefinite hold. The debate illustrates beautifully the fundamental economic concept of opportunity cost because in this case 1) the money is already in our state paws no matter what projects we use it for; 2) Due to criticism over the earmark process the money can be reallocated by the state to any valid transportation project; and 3) the money cannot be cashed in. Therefore, we can clearly see that the true cost of the Knik Arm bridge is the Cooper Landing bypass -- or perhaps some other project -- that is given up.

The economist Frederic Bastiat wrote an illuminating little story about all this called the Parable of the Broken Window. It is surprisingly relevant to the way some Alaskans view federal and state spending.