Tag Archives: Mandate

The Mandate And The Cost Of Insurance

Let’s set aside the debate on whether or not the mandate represents a penalty or a tax.  In many ways, it doesn’t matter; the bill was made law, the law was challenged and the law remains the law.

A question occurred to me as I was watering failing to save my flowers Saturday:

Given that individuals are offered the choice of purchasing health insurance or paying a penalty, and that penalty is paid to the federal government of the United States, what will this do to health insurance premiums?

The answer is, of course, “Insurance premiums will go up.”

Individuals will make a value based decision on whether or not to purchase insurance or pay the penalty/tax.  The problem comes into play when you consider that the organization making the determination, and receiving the money, of how much that penalty/tax will be is NOT the same organization that is required to insure people who decide not to purchase insurance.

In short, the insurance company has to cover uninsured individuals while the government keeps the penalty/tax.  What this means to the insurance companies is that they have to cover uninsured people for free.  And since coverage of medical costs isn’t really free, they will have to raise the rates of everyone to cover those costs.  As those costs rise, more and more Americans will conduct value propositions and conclude that purchasing insurance isn’t worth it.

And costs will rise.

And costs will rise.

And costs will rise.

Food And Medical Care

During the hearing of Obamacare, the news was full of analysis.  One of those pieces, in the “USA Today”, made a point that food is more of a basic need to people than healthcare:

A brief submitted by 215 economists argues that food is even more basic to survival than health care…

I was struck by this last night as I was cleaning out some of my “stack” in my office last night.

See, the food delivery market, while not perfectly so, is a free market example of how goods can be distributed efficiently.  Based on demand and the profit motive, food stuffs are delivered to a literal market where individual shoppers are allowed to “ration” themselves based, in part, by how much money they have and what types of services they want.

For example, in my market I can by generic chicken soup, Ramen noodles and rice.  Or, I can walk 50 feet away and purchase hand rolled sushi, fillet mignon, $60 wine and lobster.

As a real example of the power of markets I picked up this flier:

For $5, this profit driven market is offering a meal that feeds 4 people, perhaps more if the kids are younger.

If medical care were subject to the same market forces you would see the same thing happen with the cost of medical care.  In the same way, if you allowed health insurance to be impacted by the same market forces, you would see prices of health insurance react in the same manner.

It’s only when government intercedes, by mandating acupuncture coverage, or by restricting the sale of insurance polices across state lines, that you see the price of a good or service go up.

Government Mandates

For those of us who support the government intervening in the insurance market only to make things more expensive to make things better for everyone, I have a question:

If you support the government forcing Americans to buy insurance AND you support the government forcing insurance companies to offer free birth control, why don’t you support the government requiring people to purchase fresh fruit AND support the government forcing insurance companies to offer free broccoli?

Jesus Was A Socialist

I see these from time to time.  Mostly on Facebook, sometimes in comments.  The gist is that Republicans are seen as Christians.  Christians, well, we have our Jesus.  And the theory is that if our Jesus commanded that we take care of the poor and the sick, why are we so against things like Obamacare and Medicaid?

Usually the point is made through a drawing, picture or cartoon:

I’m not so tender and fragile that I don’t find humor in this.  And the point is not lost on me either.  We SHOULD work to make the world better for all of those in it; especially those who are least able to do this for themselves.

That’s where the point kinda ends though.  See, the idea that because Jesus would have us do a thing out of love and goodwill is vastly different that thinking we should create a government mandate to require that same activity.

For example, Jesus also commands us to pray like this:

Our Father, who art in heaven, hallowed by Thy Name…..

No one seriously feels that we should pass a law that says all of us should pray the Lord’s Prayer.  Additionally, Jesus commands us to:

Go, baptize all the nations.

In a similar manner, no one thinks that we should pass legislation requiring all US citizens go and get baptized.

My reaction to these cute and witty injections is usually to take the  message to heart, laugh, think of my friend on Facebook who posted it that I haven’t seen in 20 years and move on.  Sometimes I need to comment.

Hat Tip: Gette