Tuesday, March 11, 2008

Two Good Articles On Health Insurance

The blogosphere had two recent high-profile articles discussing the purpose of insurance and the proper role (or lack thereof) of government mandates.

The first was from "Today's Health Insurance Ain't Insurance", from Pajamas Media blogger Charlie Martin. Here's an excerpt:
...So now it's election season 2008, and the candidates are talking about the "health care crisis." It's a funny sort of crisis in one sense, because people are managing to survive to be older and healthier than they were before the crisis. But if a politician insists it's a crisis, who are we to argue? Certainly there is an issue that some people can’t afford to pay cash for day-to-day care, and old-fashioned "major medical" is hard to find.

The solution we have been offered on both sides of the aisle is something like the "Massachusetts Plan," where everyone has to have health insurance. "Has to have," here, being enforced by the government — Senator Clinton has spoken specifically of garnisheeing wages of people who don't want to participate — with some kind of public funding for people who just can't afford it.

Here's where things start to get tricky, though. Some people — young people just out of school for example — aren't making a lot of money, but then don't really want to spend a lot of money on insurance. Normally, they wouldn't have to: other than accidents and very rare diseases, a 25-year-old shouldn't normally need anything more than minor maintenance and occasional hangover cures. The idea of the mandate, though, is that if you include these low-risk people in the whole insurance pool, the premiums they pay can be added back to the pot for older people and people with serious illnesses, which makes the insurance more "affordable" — for them.

It's exactly the same situation as if we charge a 25-year-old the same amount for a year's term life insurance as we charge his 75-year-old grandfather: it may make the insurance more affordable for Granddad, but it does so by overcharging young Elmo. Add in the "mandate," so Elmo can't opt out, and we have a universal care plan that forces Elmo to pay for services he doesn't get so that Granddad can pay less for the services he gets. But it's "voluntary" — you get to pick your insurance plan to some extent — and it’s not "tax-supported" because you are just paying the insurance company directly.

Except for the cost of administering the plan itself, and the wages they take through a garnishee if I don't "volunteer."

So in this mandated universal coverage plan, the government comes and makes me give someone money so it can be distributed to other people, and I don't have any choice about participating. Where I come from, we call that a "tax."

Whatever it is, it ain't insurance.
I thought Charlie Martin's analysis of the history and nature of insurance was on-target. (Pajamas Media is a group blog that includes free speech advocate Flemming Rose of "Danish Muslim cartoons" fame as one of their contributors.)

The second is a related short piece, "Protect them from themselves?" by Atlantic writer Megan McArdle. Responding to the claim by socialized medicine supporter Ezra Klein, "...[M]andates matter because, sometimes, folks have to be protected from their worst instincts", she asks:
...I'm persistently disturbed by the notion that most of our fellow citizens are intellectual children who need to be forced to do what is good for them even at massive cost to their liberty, and ours.
In the comments section, I replied:
Megan's final sentence cuts to the heart of the issue: "Whose life is it anyways - yours or the government's?"

When this gets applied to the health care issue, the question becomes:

Should government bureaucrats decide how and for what people can spend their own health care dollars? Or do they respect the individual's right to make that decision according to his own best judgment for his own benefit?

I come down firmly on the side of the second position.