I just got this e-mail from the President. In it, he accuses me of being part of an “avalanche” of misinformation and scare tactics. Funny, sounds a little like his health care promises. In any case, here are the 8 things he promises to deliver, Santa Claus should be so kind.
- No discrimination for pre-existing conditions
- No exorbitant out-of-pocket expenses, deductibles or co-pays
- No cost-sharing for preventive care
- No dropping of coverage if you become seriously ill
- No gender discrimination
- No annual or lifetime caps on coverage
- Extended coverage for young adults
- Guaranteed insurance renewal so long as premiums are paid
Let’s take them in turn:
1. No discrimination for pre-existing conditions
- So now we have a President that is mandating a company to serve a customer even if it does not want to. But think of this simply – why should a particular company, just because they are in the business of offering insurance protection, be forced to subsidize the known expenses of a person? It is certainly unfortunate if someone was born with a disability, or develops one before purchasing insurance, but it is an extremely hard argument to make that a particular company is now responsible for taking care of this person? If “we as a society” feel like such persons are deserving of help, then “we as a society” should be prepared to take care of this person – and not to concentrate this “charity” on a few companies. Note, that this is certainly NOT a defense of the insurance companies – they will be logrolling on this one – but it is an alert to those who believe that arbitrary laws are not part of a responsible democracy.
- Why is health care special? Are there pre-existing conditions preventing customers in other industries from being served? Until very recently, there were not many golf clubs made for left-handed individuals. These folks were born left-handed through no fault of their own – should sporting good stores be forced to offer affordable left-handed clubs to them? You should note that today these clubs are widely available in all models and styles. Or how about folks with various food allergies? Some have a pre-existing allergy to eggs. Should a breakfast diner be forced to add items to the menu that cater to those with food allergies? The list of things where we have pre-existing conditions is endless
2. No exorbitant out-of-pocket expenses, deductibles or co-pays
- This is a good one. How do you propose we define “exorbitant” Mr. President? Is it something that only you could afford? Is it the same way we define “jobs created“? I happen to like my current insurance package – it is a high deductible policy that will cover me generously for unforeseen, large insurable expenses. I thought you campaigned on the principle that people who like what they have will be allowed to keep it. I guess the Commissars thought better on that promise? And despite my serious reservations that consumer drive health care can work under the current institutional and regulatory framework, you are basically outlawing any proposals that move us in that direction. If anyone has been hammered for calling you a socialist in the past, perhaps they were going too far. Be here you have put in print one of the core principles of that doctrine. And it stinks
- Why is health care special? Do you plan on rewarding all of us hoi polloi similar gifts when it comes to our home owners insurance or car insurance or life insurance or personal property insurance?
3. No cost-sharing for preventive care
- Again, you are telling health insurance companies that they should be forced to make you pay little or nothing for doing things that are part of the normal and expected routine for health care. If people are too “irrational” (as you often claim they are) to engage in preventive care would they be any more inclined to get preventive care if it is free? The economists who believe in rationality would argue yes, but then you would seem to be a walking contradiction. When are we irrational?
- Why is health care special? When I get my oil changed, I pay full price for that. When I replace the filters in my home HVAC system, I pay full price for that. Will you make supermarkets provide me with free yogurt, low-fat bagels, fruit and other healthy eating items? Will you force health clubs to provide memberships free of charge? Will you buy me a new sea-kayak or road bike?
4. No dropping of coverage if you become seriously ill
- This might be profitable as a one time affair, but let me ask you a question. Why do restaurants not cheap out on their meals? Why does your grocery store not poison you or try to sell you milk that is 10% water? Why don’t cell phone companies eliminate service to some areas after that have hooked you into a two-year contract? Why don’t the lawn-care folks take my money and run before coming to finish the scheduled 4 treatments?
- Why is health care different? Oh yeah, because there is no real competition and because it is largely tied to employment. You see what happens to Wegmans if it starts short-changing its customers, or to Jiffy Lube if it stops putting oil in your car when they promise you that they would.
5. No gender discrimination
- So, should women be forced to purchase insurance that covers them for the misfortune of getting testicular cancer?
- Why is health care different? Should beauty salons that cater to doing women’s hair be forced to have male customers? Should an all-boys high school be forced to install women’s rest rooms?
6. No annual or lifetime caps on coverage
- Do you not see the imcompatibility of this provision with 1, 2 or 3? So, there can be no cost sharing, there must be free care at the front end, but then there can be no caps at the back end. But such a provision just goes to demonstrate that health insurance is not insurance. The purpose of insurance is to insure people from the possibility of very high uncertain expenses. Fairly priced policies would charge premiums to make sure that there is NOT a cap on coverage – that is the reason we all want insurance for anything else in the first place. Otherwise, what health insurance is … is a subsidy for getting medical care at the expense of people who do not use much medical care.
- Why is health care different? If I wished to purchase a warranty for my vehicle that covers only particular parts and repairs for a particular period of time, am I not permitted to do so? What if we forced auto companies who offered warranties that they had to replace engine belts in a car forever … no matter what? And the same thing for transmissions, and all other moving parts?
7. Extended coverage for young adults
- If there were more evidence needed that we want to look more like Europe, here it is. This provision calls for extension of a family’s coverage to “children” up to age 26. Why 26? And has anyone thought through the implications of this on an insurer’s willingness and ability to provide family coverage? You do realize that it is not inconceivable that singles and couples without children heavily subsidize the insurance costs of families.
- Why is health care different? What is next, mandating that all parents maintain rooms in their homes for their children to live in long after they fled the nest? Are couples with grown children morally responsible for not downsizing their homes While we are at it, perhaps we can make sure that summer camps remain open to all “children” up to 26? I am sure my daughter would love her “Discovering Dinosaurs” camp to have some more mature children in it. While we are at it, why not raise the age limit on when “children” can work from 16 to 26?
8. Guaranteed insurance renewal so long as premiums are paid
- Cool – so now that I have paid a year of premiums, I can take up smoking, I can eat Big Mac dinners every night for the rest of my life, and I can pursue my dream of being an artistic sky-diver … and the rest of you poor slobs have to subsidize this lifestyle. Awesome!
- Why is health care different? I can see this one down the road … so long as a worker shows up to work every day for a year, they are guaranteed to have their jobs renewed – even if they work at a place that makes these things, for instance.
We know why such a pronouncement was made. Not many voters can look behind the immediate consequences of the offering of such gifts. They like guarantees. They like peace of mind. They like thinking they don’t have to pay to get more. And when someone even scratches the surface to reveal that there are unintended consequences of these policies, they are accused of being misleading and partisan. If such is the case, then I am as misleading and partisan as they come.
Update: more from Arnold Kling:
In contrast, there is a lot of room to move health care in the other direction–toward free markets. The only real health care reformers are those of us on the libertarian fringe. The two major parties are just posturing. That’s why I haven’t written much about the day-to-day debate on “reform.” It is not clear to me that defeating the Democrats’ legislation is something I should root for. We’re still nowhere near considering real reform.