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ObamaCare Could be Driving People to Drink, Study Finds

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Do you want a case of vodka with your ObamaCare this year? Or perhaps a barrel of brandy?

More people do than used to be the case, and it ain’t pretty.

Only a few years into Obama’s signature healthcare law, also known as the Affordable Care Act, and more Americans have taken to the bottle, according to new research.

“We find relatively robust evidence that the ACA increased risky drinking,” states the report, “The Affordable Care Act on Health Behaviors After Three Years,” published by the National Bureau of Economic Research earlier this month. The paper was written by researchers from Georgia State University, University of Pennsylvania, University of Kentucky, and Maryland-based analysis firm Impaq International.

The idea behind the research was to look at the impact of the ACA and the expansion of Medicaid on behavior related to future health risks, both those that increased the likelihood of future problems and those that decreased the chance.

For each year of the analysis, which ran from 2011 through 2016, the researchers collected data on more than 300,000 adults aged 19-64 years. That covered the three years before the full implementation of the ObamaCare program and three years after the kickoff date when buying insurance became mandatory.

What they found was that risky drinking behavior was trending downward during the data sample’s first three years, which was the before-ObamaCare period. After the ACA was implemented, things changed for the worse.

“We observe only one statistically significant [risky behavior] effect of the full ACA: a 1.6 percentage point increase in the probability of being a risky drinker,” the report says. “This represents a sizeable 7.4 percent increase relative to the sample mean.”

In other words, the average rate of risky drinking jumped to 23.1 percent, up 1.6 percentage points after the ACA launched. And that upward swing in dangerous alcohol intake was not just the effect of statistical noise.

It is almost all driven by ACA rather than the expansion of Medicaid, the authors write.

That increase in unhealthy boozing is in stark contrast with other behaviors that are bad for long-term health. For instance, the downward trend in smoking continued after the implementation of the healthcare act, the report says. Other beneficial activities that saw an increase after the ACA got implemented were regular check-ups, pap tests, mammograms, and HIV tests, the study reveals.

Why did the drinking increase?

Why did people start hitting the bottle after the advent of ObamaCare?

Based on my own experience of dealing with providers in the individual health insurance market, it would be easy just to blame the companies that provide the mandated insurance coverage.

The health insurance business was already a Byzantine bureaucracy before Obama pushed his signature law. The new rules just made that side of it worse to the point of absurd.

Would you really blame anyone who hankered for an evening of excessive boozing after they spent a frustrating day on the phone dealing with the insurance company? I certainly wouldn’t, at least not after my own experiences.

Still, that isn’t what the report’s authors point to. They point to something that economists call “moral hazard.”

The idea behind moral hazard, as my economics mentors have often told me, is that when you have insurance of any kind your behavior changes.

Why lock your car when the insurance company will buy you a new one if it is stolen? Why worry about turning off the oven if the insurer will replace your burned-out house? You get the idea.

It even works when the costs aren't entirely covered.

"There’s no reason that the cost has to be eliminated completely for some sort of moral hazard to happen – even a small reduction might influence at least some people on the margin," says Charles Courtemanche, one of the report's authors and a professor of economics at Georgia State University. In other words, a drop in the costs, even if not a total drop, can make you change your behavior.

That, of course, gets to the problem with drinking 17 pints of lager in an evening: if you do it too often, then your health insurance may not be able to fix your health, ever. Your liver may simply stop working or you may just die.

Courtemanche acknowledges that the insurance doesn't eliminate all the costs. It does reduce the financial cost of getting healthcare. But it doesn't do much to change the damage to your health.

The reduction in costs "might be enough to influence the marginal person," he says. Or, put another way, while not everyone will hit the booze because they have health insurance, some will do so and over a population it will have an effect of changing the drinking statistics.

There are economists who don’t think the moral hazard reasoning is a “tough sell.”

“Given the fact that we were in the middle of the worst recession in 80 years bringing poverty, homelessness, and depression, it's difficult to attribute it exclusively to moral hazard resulting from the ACA,” says Tony Nash, founder of analytics firm Complete Intelligence and an economic policy advisor. “If drinking rose due to moral hazard, why didn't overeating, skydiving or running with scissors spike because of the ACA?”

Courtemanche says that the logic behind moral hazard would apply to those other behaviors mentioned by Nash as well.

"It would absolutely be theoretically possible that overeating, skydiving, or running with scissors could have increased because of the ACA," he says. "I went a month without health insurance many years ago, and I remember not playing sports during that month specifically for that reason."

Maybe the matter should be discussed further over a drink, or two.