According to the New York Times, many states are delaying creating the health insurance exchanges mandated by Obamacare, waiting for the outcome of the constitutional challenge to the law. In the meantime, we get such delusional claims about the act as the following:
Proponents, including Gov. Andrew M. Cuomo of New York, a Democrat, say the exchanges will simplify the purchase of insurance and cut costs by increasing competition.
Has there ever been a federal government initiative that has “simplified” anything? Has Cuomo never seen a Medicare form? Indeed, in the next breath, the Times goes on to note:
The complexity of the computer systems needed to verify eligibility, enroll consumers, calculate subsidies and connect the exchange to state Medicaid agencies has slowed work in some states.
As for increasing competition, why not just allow the purchase of insurance across state lines? And drive down costs by removing the tax benefits for employer-purchased insurance.
I actually support in theory the mandate to purchase insurance, since I am fed up with paying for emergency treatment for people too irresponsible to insure themselves, and I see little difference between mandated car insurance and mandated health insurance—in most places, having a car is virtually a necessity of life. But however defensible the idea of mandated insurance, the bureaucratic quagmire that it will unavoidably spawn renders the concept a nightmare and something that no realist about government can possibly support.
“I see little difference between mandated car insurance and mandated health insurance”
The difference is that if I hit you with my car and I’m not insured, you (or your insurance company) have to pay extra because of my mistake. There is nothing analogous with health care. If I get sick, I can’t make you pay for it. (OK, well, I shouldn’t be able to make you pay for it; the laws that say differently should be abolished)
I’m kind of with Heather on the “if we can make them pay” issue. The most philosophical libertarian can’t escape the jurisdiction of the Fire Department, because society won’t let your house burn down through apathy; so you can be taxed to pay for it.
If we’re going to provide illegal immigrants with health services anyway, then make them pay. But I have a feeling that the Democrats’ long-term plan is to guarantee that everyone’s covered, but that making them pay is unconstitutional to enforce. So, the whole thing’s contingent on the automatic-ness of the enforced cuts.
But I don’t necessarily support cross-state insurance. It will just encourage one state to attract jobs by racing to the bottom, like Delaware did with credit cards, and essentially nationalize the level at which the industry dictates its own regulation.
One wag said, “Obamacare is the law of unintended consequences passed by Congress, signed by the President, and soon to be approved by the Supreme Court.”
“I see little difference between mandated car insurance and mandated health insurance—in most places, having a car is virtually a necessity of life” Car insurance and health insurance have a couple of things in common. The chief of these is that both categories of products are called “insurance.” The rest of the similarities, such as the fact that the some of the same companies sell them and some of the same agencies regulate them, stem from this point of vocabulary.
The similarities between car insurance and health insurance, however, are dwarfed by the differences between them. You choose an auto dealer, choose a car, negotiate a price for that car, arrange financing for it, pay that price, buy the fuel of your choice for it, decide which routine maintenance tasks you will perform on it yourself and which you will entrust to a mechanic, choose the mechanic who will perform those tasks, and pay that mechanic for those routine tasks, all without input from your insurer. If car insurance were the same thing as health insurance, you would be dependent on the insurer to make all of these payments and all of these decisions for you. To use mandates for car insurance as an analogy to justify mandates for health insurance, then, is like saying that because lightning rods protect your house from lightning, they should also protect your garden from lightning bugs.
If the USA’s political leaders were serious about controlling the cost of health care, in fact, they would move to make health insurance more like car insurance- not by making it mandatory, but by removing the tax incentives that reward employers for redirecting money from employee’s paychecks to health insurance premiums. Under our current system, a substantial percentage of the compensation US employers pay to keep their employees on staff goes, not to them in the form of money they can spend as they see fit, but to insurers to form funds from which employees can draw only in the form of medical expenses. Therefore, when those employees become consumers of health care they have no incentive to keep the cost of their health care down. Health care providers obviously have no such incentive. Even employers and insurance companies have only a very weak incentive to keep costs down, since employers are paying premiums with money that would otherwise go to the corporate income tax or to some other tax shelter. That’s why the cost of health care has for many consecutive years grown at a rate well in excess of the general rate of inflation, something which is not true of cars, car insurance, or any of the services car insurance usually covers.
If the corporate income tax were abolished, it would be possible for health insurance to become like car insurance. Consumers could choose and pay for their own routine health care, and pay also for insurance to cover catastrophic health expenses, as consumers now buy car insurance to cover catastrophic auto expenses. Doubtless, the modern world being what it is, there would be a political demand for substantial public sector subsidies for low-income people who have need of health care. So long as these subsidies were in the form of direct transfers of money to these potential consumers, they might leave the recipients with as much incentive to negotiate for lower prices as they have when considering the purchase of other goods and services that money could gain them. Not being as far to the right (or as secular) as most people who hang around here at Secular Right, I would be eager to support a generous program of subsidies along these lines.
The main legal (as opposed to philosophical) distinction between mandating car insurance vs. health insurance is that states, not the federal government, mandate car insurance. If the federal government can force a private individual to purchase, from a private company, a product that he doesn’t want, what’s left of the concept of “enumerated powers” is dead.
Economically, health insurance hasn’t been “insurance” for decades. It’s really a prepayment program, as is shown by the flap over contraceptive coverage: What are you “insuring” against, the possibility that you might want to use contraception someday?