1 Symposium, Improved Health at a Reduced Cost? Economic Perspectives on the Patient Protection & Affordable Care Act, 40 AM. J.L. & MED. 178 (2014).Google Scholar

2 Id.; see also generally Tovino, Stacy, A Proposal for Comprehensive and Specific Essential Mental Health and Substance Use Disorder Benefits, 38 AM. J.L. & MED. 471 (2012)CrossRefGoogle ScholarPubMed; Teitelbaum, Joel et al., Translating Rights into Access: Language Access and the ACA, 38 AM. J.L. & MED. 348 (2012)CrossRefGoogle Scholar.

3 26 U.S.C. § 5000A (2012).

4 See id.; 42 U.S.C. § 18022 (2012); Moncrieff, Abigail, The Individual Mandate as Healthcare Regulation: What the Obama Administration Should Have Said in NFIB v. Sebelius, 39 AM. J.L. & MED. 539, 544-47 (2013)CrossRefGoogle ScholarPubMed (discussing healthcare market failures from consumers’ optimism bias, hyperbolic discounting, and credence goods).

5 See Moncrieff, Abigail, The Supreme Court's Assault on Litigation: Why (and How) it Might be Good for Health Law, 90 B.U. L. REV. 2323, 2346 (2010)Google Scholar (“[H]ealthcare markets are fraught with information and agency costs that prevent individual voters and consumers from representing their own interests.”).

6 See id. at 2365-68 (arguing that federal agency regulation of health care decreases information costs and promotes efficiency through expertise and economies of scale).

7 26 U.S.C. § 5000A.

8 Id. § 18022.

9 Id. § 300gg-13.

10 Id. § 300gg-18.

11 See The Patient Protection and Affordable Care Act: Detailed Summary, DEMOCRATIC POL’Y CTR., available at http://www.dpc.senate.gov/healthreformbill/healthbill04.pdf (last accessed May 13, 2014) (“The Patient Protection and Affordable Care Act will ensure that all Americans have access to quality, affordable health care … .”).

12 See infra Part II.B.

13 See Cutler, David M. & Zeckhauser, Richard J., The Anatomy of Health Insurance, in HANDBOOK OF HEALTH ECON. 563, 588-89 (Cuyler, A.J. & Newhouse, J.P. eds., 2000)Google Scholar, available at http://www.nber.org/papers/w7176 (discussing principal-agent relationships among doctors, payers, and patients).

14 See Health Insurance Coverage of the Total Population, KAISER FAM. FOUND., http://kff.org/other/state-.indicator/total-population/ (last visited May 13, 2014) (reporting that eightyfour percent of Americans had third-party insurance in 2012).

15 See Cutler & Zeckhauser, supra note 13, at 588-89.

16 Tomas J. Phillipson & George Zanjani, Economic Analysis of Risk and Uncertainty Induced by Health Shocks: A Review and Extension, in HANDBOOK OF THE ECONOMICS OF RISK AND UNCERTAINTY 453, 465-66 (Mark J. Machina & W. Kip Viscusi eds., 2014).

17 See generally Keller, Punam A. et al., Depressive Realism and Health Risk Accuracy: The Negative Consequences of Positive Mood, 29 J. CONSUMER RES. 57 (2002)CrossRefGoogle Scholar (showing that individuals with good mental health were overconfident in assessing health risks, as opposed to depressed individuals, who were accurate); Mirowsky, John, Subjective Life Expectancy in the US: Correspondence to Actuarial Estimates by Age, Sex and Race 49 SOC. SCI. & MED. 967, 967-79 (1999)CrossRefGoogle Scholar (showing overconfidence in subjective assessment of life expectancy); Leslie Alderman, Getting a Guide for the Jungle of Individual Health Policies, N.Y. TIMES (Sept. 10, 2010), http://www.nytimes.com/2010/09/11/health/11patient.html.

18 See generally Grill-Spector, Kalanit et al., Repetition and the Brain: Neural Models of Stimulus-Specific Effects, 10 TRENDS COGNITIVE SCIS. 14 (2006)CrossRefGoogle Scholar; Find an Agent Database, NAT’L ASSOC. HEALTH UNDERWRITERS, https://www.nahu.org/consumer/findagent.cfm (last visited April 11, 2014).

19 See Tversky, Amos & Kahneman, Daniel, Judgment under Uncertainty: Heuristics and Biases, 185 SCI. 1124, 1124 (1974)CrossRefGoogle ScholarPubMed (showing that, when making decisions under uncertainty, “people rely on a limited number of heuristic principles which reduce the complex tasks of assessing probabilities and predicting values to simpler judgmental operations”).

20 See generally TALI SHAROT, THE OPTIMISM BIAS: A TOUR OF THE IRRATIONALLY POSITIVE BRAIN (2011); see also Weinstein, Neil D., Reducing Unrealistic Optimism About Illness Susceptibility, 2 HEALTH PSYCHOL. 11, 11-12 (1983)CrossRefGoogle Scholar (“For many health and safety threats … people tend to believe that they are less at risk than others around them.”).

21 See Cass R. Sunstein, Choosing Not to Choose 3-4 (Harvard Pub. L., Working Paper No. 14- 07, 2014), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2377364 (“Some people choose not to choose … [because] [t]hey might be aware of their own lack of information or perhaps their own behavioral biases (such as unrealistic optimism).”).

22 What is Liposarcoma?, LIDDY SHRIVER SARCOMA INITIATIVE (2012), available at https://web.archive.org/web/20140327144350/http://sarcomahelp.org/liposarcoma.html (last visited May 10, 2014) (hosting a copy of the webpage, as it appeared on Mar. 27, 2014, which is no longer available on the SarcomaHelp website) (“Scientists do not yet know the cause of liposarcoma.”).

23 Id.; Debra Kessler, M.D., Salem Health: Cancer, Liposarcomas, SALEM PRESS, http://salempress.com/store/samples/cancer/cancer_liposarcomas.htm (last accessed May 11, 2014) (“Annually 2.5 cases [of liposarcoma] occur per 1 million population.”).

24 See Avik Roy, Health Care and the Profit Motive, NAT’L AFF. (2010), http://www.nationalaffairs.com/publications/detail/health-care-and-the-profit-motive (last accessed April 11, 2014).

25 See Health Insurance Coverage of the Total Population, KAISER FAM. FOUND., http://kff.org/other/state-indicator/total-population/ (last visited May 3, 2014) (finding that 48% of the 85% of Americans with third-party insurance have employer-provided insurance).

26 See Moncrieff, supra note 5, at 2353 (“Part of the value of the ESI system, then, is that employers (and other large-group purchasers) are well-positioned to aggregate information across employees and over time.”).

27 See Peele, Pamela B. et al., Employer-Sponsored Health Insurance: Are Employers Good Agents for Their Employees?, 78 MILBANK Q. 5, 15-16 (2000)CrossRefGoogle ScholarPubMed (“Most employees [surveyed] were of the opinion that their employers were far more knowledgeable about health insurance plans and were much better equipped to sort through the plans and options than they were individually.”).

28 See Labor Force Statistics from the Current Population Survey, BUREAU LAB. STAT., http://www.bls.gov/web/empsit/cpseea08.htm (last modified May 2, 2014) (reporting over 9 million self-employed workers in 2014); Labor Force Statistics from the Current Population Survey, BUREAU LAB. STAT., http://www.bls.gov/cps/cpsaat01.htm (last modified February 26, 2014) (reporting 11 million unemployed workers in 2013).

29 See Percent of Private Sector Establishments That Offer Health Insurance to Employees , KAISER FAM. FOUND., http://kff.org/other/state-indicator/percent-of-firms-offering-coverage/ (last visited May 1, 2014) (reporting that only 50% of private firms offer health insurance coverage).

30 See Moncrieff, supra note 5, at 2352 (“[T]he … insurance market … is fraught with information costs, preventing individual patients … from judging the quality of a given insurance contract.”).

31 See Moncrieff, supra note 4, at 557 (“[T]he vast majority of self-insured individuals are also underinsured.”).

32 See id. at 558 (“The problem that Obamacare sought to fix, then, is not just that the self - insured consume care they cannot afford; it is also that they do a bad job of consuming care they can afford.”).

33 26 U.S.C. § 5000A (2012).

34 The mandate penalty maxes out in 2016 and beyond at the greater of 2.5% MAGI or $695, but cannot exceed the national average cost of a bronze-level plan. So, the highest earning individuals will be indifferent (because their contribution will be capped by the cost of a bronze plan), but middle - income (paying 2.5% MAGI) and low-income (paying $695) individuals will face a penalty less than the cost of a bronze plan. See ANNIE L. MACH, CONG. RESEARCH SERV., R41331, INDIVIDUAL MANDATE UNDER ACA 2 (March 6, 2014), available at http://www.fas.org/sgp/crs/misc/R41331.pdf.

35 42 U.S.C. § 18022 (2012).

36 Of course, Tea Party Americans experience a non-monetary cost from losing the battle in a majoritarian system and a separate non-monetary cost from the imposition of the government as their delegate in this choice. They must now decide whether the hedonic injury of complying with majoritarian-induced government directives is worth more or less to them than the cost of paying the penalty for failure to insure. That decision is not an easy one and imposes its own cognitive costs; they might choose to comply but feel depressed by the sense of defeat and compulsion in making that choice.

37 See Cutler & Zeckhauser, supra note 13, at 588-89 (“Patients, physicians, and insurers are in a principal-agent relationship: the patient (principal) expects the doctor (agent) to act in his best interest when he is sick.”).

38 See id. at 588 (“In most cases of serious expenditure, it is the doctors who make the resource - spending decision, with patients and insurers bearing the costs; patients usually do not know the charge until the bill comes.”).

39 See id. at 590 (“Increasingly, insurers attempt to provide incentives for providers to limit spending.”).

40 See 42 U.S.C. § 1395y(a)(1)(A) (providing that Medicare will not make payments that “are not reasonable and necessary for the diagnosis or treatment of illness or injury”); Beal v. Doe, 432 U.S. 438, 444-45 (1977) (“Although serious statutory questions might be presented if a state Medicaid plan excluded necessary medical treatment from its coverage, it is hardly inconsistent with the objectives of the [Social Security] Act for a State to refuse to fund unnecessary though perhaps desirable medical services.”).

41 See Hall, Mark A. & Anderson, Gerard F., Health Insurers’ Assessment of Medical Necessity, 140 U. PENN. L. REV. 1637, 1647 (1992)CrossRefGoogle Scholar (“By the end of the 1970s, many insurers had adopted two new contractual revisions in response to this additional round of losses: first, they specified that medical necessity is to be determined in the insurer's judgment, and second, they explicitly excluded payment for ‘experimental’ or ‘investigational’ procedures.”).

42 See id. at 1645-46.

43 See Moncrieff, supra note 5; see also Mooney, Gavin & Ryan, Mandy, Agency in Health Care: Getting Beyond First Principles, 12 J. HEALTH ECON. 125, 127, 132 (1993)CrossRefGoogle ScholarPubMed (observing that it is difficult and costly for principals to monitor their agents, particularly in the healthcare context).

44 See Bradley Dowden, Fallacies: Unrepresentative Sample, INTERNET ENCYCL. OF PHILOSOPHY, http://www.iep.utm.edu/fallacy/#UnrepresentativeSample (last visited May 11, 2014) (“Knowingly selecting atypical members of the population produces a biased sample.”).

45 See Peele, Pamela B. et al., Employer-Sponsored Health Insurance: Are Employers Good Agents for Their Employees?, 78 MILBANK Q. 5, 7 (2000)CrossRefGoogle ScholarPubMed (finding employers are effective agents for their employees if “[e]mployers understand their employees’ health plan preferences[;] … incorporate employee preferences into their health plan designs[;] … [and] establish mechanisms for soliciting and understanding their employees’ preferences and provide useful information to their employees about their health insurance offerings.”).

46 See Moncrieff, supra note 5, at 2352 (“The market for employer-sponsored health insurance is undoubtedly a competitive one, with many MCOs and other insurers trying to sell their products to many employers.”).

47 See id. at 2353 (“Part of the value of the ESI system, then, is that employers (and other large - group purchasers) are well-positioned to aggregate information across employees and over time.”); Peele et al., supra note 45, at 15-16 (“Most employees [surveyed] were of the opinion that their employers were far more knowledgeable about health insurance plans and were much better equipped to sort through the plans and options than they were individually.”).

48 See Fronstin, Paul, Employment-Based Health Benefits: Trends in Coverage, 1997-2010, 370 EBRI ISSUE BRIEF 1 (Apr. 2012)Google Scholar, available at http://www.ebri.org/pdf/briefspdf/EBRI_IB_04-2012_No370_HI-Trends.pdf (finding that “[b]etween 1997 and 2010, the percentage of workers offered health benefits from their employers decreased fr om 70.1 percent to 67.5 percent.”); Steven Greenhouse & Reed Abelson, Wal-Mart Cuts Some Health Care Benefits, N.Y. TIMES (Oct. 21, 2011), available at http://www.nytimes.com/2011/10/21/business/wal-mart-cuts-some-health-carebenefits.html (“After trying to mollify its critics in recent years by offering better health care benefits to its employees, Wal-Mart is substantially rolling back coverage for part -time workers and significantly raising premiums for many full-time staff.”).

49 42 U.S.C. § 300gg-41 (2012).

50 Id. § 300gg-18.

51 Id.

52 See SUZANNE M. KIRCHOFF & JANEMARIE MULVEY, CONG. RESEARCH SERV., R42735, MEDICAL LOSS RATIO REQUIREMENTS UNDER THE PATIENT PROTECTION AND AFFORDABLE CARE ACT (ACA): ISSUES FOR CONGRESS 1 (2012), available at http://www.fas.org/sgp/crs/misc/R42735.pdf (“In general, the higher a plan's [medical loss ratio], the more value a consumer is receiving (i.e., the more each dollar of premiums paid goes toward health benefits and not towards overhead).”).

53 See Cutler & Zeckhauser, supra note 13 at 590 (“The medical care system is a network, with patients, monies and information flowing from one party to another. The information flow to insurers, however, is not so rich that they can guarantee that only cost -effective care will be provided.”).

54 See id.

55 See id. at 588 (“In most cases of serious expenditure, it is the doctors who make the resource - spending decision, with patients and insurers bearing the costs; patients usually do not know the charge until the bill comes.”).

56 See Moncrieff, supra note 31, at 548 (“If individuals are not required to spend money on this kind of future-regarding care, they will consume systematically too little of it.”).

57 See id. at 549 (“[B]ecause of hyperbolic discounting, the longer timescale between present investment and future reward causes a bigger gap between optimal and actual present valuation.”).

58 See Herring, Bradley, Suboptimal Provision of Preventive Healthcare Due to Expected Enrollee Turnover Among Private Insurers, 19 HEALTH ECON. 438, 447 (2010)CrossRefGoogle ScholarPubMed (“[E]nrollee turnover among private insurers results in a disincentive to provide socially optimal levels of preventive care.”).

59 See generally SHAROT, supra note 20; Laibson, David, Golden Eggs and Hyperbolic Discounting, 112 Q. J. ECON. 443, 446 (1997)CrossRefGoogle Scholar (“Hyperbolic discount functions are characterized by a relatively high discount rate over short horizons and a relatively low discount rate over long horizons. This discount structure sets up a conflict between today's preferences, and the preferences that will be held in the future.”); Weinstein, Neil D., Reducing Unrealistic Optimism About Illness Susceptibility, 2 HEALTH PSYCHOL. 11, 11-12 (1983)CrossRefGoogle Scholar (“For many health and safety threats, though not all, people tend to believe that they are less at risk than others around them[.]”).

60 See 42 U.S.C. § 300gg-13 (2012). But see Hobby Lobby Stores, Inc. v. Sebelius, 723 F.3d 1114 (10th Cir. 2013), cert granted 134 S. Ct. 678 (2013); Petition for Writ of Certiorari at I, Hobby Lobby, 723 F.3d 1114 (No. 13-354) (petitioning as to the constitutionality and legality of rule requiring most employee health plans to offer free contraceptive services).

61 42 U.S.C. § 300gg-13.

62 U.S. PREVENTIVE SERVS. TASK FORCE, http://www.uspreventiveservicestaskforce.org/ (last visited May 12, 2014) (“The USPSTF strives to make accurate, up -to-date, and relevant recommendations about preventive services in primary care.”).

63 42 U.S.C. § 300gg-13 (providing that insurers “shall not impose any cost sharing requirements” for preventive care).

64 See supra Part II.B.

65 See generally David R. Williams & Chiquita Collins. U.S. Socioeconomic and Racial Differences in Health: Patterns and Explanations, in RACE, ETHNICITY, AND HEALTH: A PUBLIC HEALTH READER 375 (Thomas LaVeist & Lydia Isaac, eds., 2d ed. 2002); Kawachi, Ichiro, et al., Health Disparities by Race and Class: Why Both Matter, 24 HEALTH AFF. 343 (2005)CrossRefGoogle ScholarPubMed.

66 The Kaldor-Hicks efficiency criterion states that an intervention is efficient if individuals that are made worse off from the intervention can be compensated for their loss by those who are made better off from the intervention, in utilitarian terms. That is, the winners gain more than the losers lose. It has been considered an alternative to the Pareto efficiency standard, which has long been the gold standard for economists, which states that an efficient intervention makes some people better off without making anyone worse off. The Kaldor-Hicks standard is often more practicable. See, e.g., Calabresi, Guido, The Pointlessness of Pareto: Carrying Coase Further, 100 YALE L.J. 1211, 1221-27 (1991)CrossRefGoogle Scholar (discussing the superiority of the Kaldor-Hicks model over the Pareto model); Sen, Amartya, The Discipline of Cost-Benefit Analysis, 29 J. LEGAL STUDS. 931, 947 (2000)CrossRefGoogle Scholar (discussing the compensation criterion of the Kaldor-Hicks model). But see Stringham, Edward, Kaldor-Hicks Efficiency and the Problem of Central Planning, 4 Q. J. AUSTRIAN ECON. 41, 48 (2001)Google Scholar (arguing that “Kaldor-Hicks is an unusable standard”).