Compulsory Insurance is Collective Punishment
February 2nd, 2008 | by Brian Schwartz |Remember grade school, when teachers would punish the whole class for the actions of just a few troublemakers? This is collective punishment, which is typically practiced during wartime or under martial law.
Collective punishment has now arrived with compulsory medical insurance. Known as an “individual mandate,” it’s the law in Massachusetts. In Colorado, it is central to the “Blue Ribbon” Commission’s recommendations, which commissioners presented to the General Assembly last week.
Politicians peddle compulsory insurance under the guise of eliminating the “cost shift from the uninsured” by making individuals “responsible.” The story is that the uninsured get medical care without paying, which increases premium costs for the insured. So why not simply force everyone to buy insurance?
Because it scapegoats the victim and empowers the true perpetrators of our insurance mess: politicians who pass laws that make insurance and medical care so expensive.
According to the Commission’s “Baseline Coverage and Spending” report, the cost shift attributable to increased premiums is around $200 million annually. This “free from provider” cost is just $85 per privately-insured resident, or one percent of an average premium.
But the Commission’s proposed billion-dollar “cure” is itself a huge cost shift. To encourage compliance with mandated insurance, the Commission’s plan includes tax-subsidized premiums and Medicaid expansion. Per privately-insured Colorado resident, the tax increase would cost about $400. Worse yet, Medicaid itself increases insurance premiums by short-changing doctors.
And why expect this government bureaucracy to stay within budget? In Massachusetts, the Boston Globe reports that “the price tag for the initiative is ballooning.” To contain costs, authorities will “probably cut payments to doctors and hospitals, reduce choices for patients, and possibly increase how much patients have to pay.”
Second, holding people “responsible” would mean punishing freeloaders themselves and allowing providers to prevent freeloading. Compulsory insurance is the opposite: it forces the innocent to buy insurance determined by political interests, rather than their own needs. That’s collective punishment.
What if we applied the Commission’s rationale to freeloaders who leave restaurants without paying the bill? This certainly increases prices, but forcing all citizens to buy “diner’s insurance” punishes the innocent.
Third, government controls already punish the innocent - insured and uninsured alike - by making medical care and insurance prohibitively expensive.
Federal tax policy deeply discounts employer-provided insurance. This chains us to our jobs and employer insurance options. Insurance companies need not please us — they know we must change jobs to buy a competitor’s product. By forcing everyone to buy their products, we will pamper further insurance companies. Since income is taxed but premiums are not, consumers end up buying “insurance” that is really prepaid medical care. Insulated from medical costs, patients spend like business travelers on a company expense account, so medical providers need not compete on price.
On the state level, medical providers and disease constituencies lobby to force insurance to include benefits that many customers do not need. For example, Colorado law compels widowed wives to pay higher premiums for prostate screening, maternity, and marital therapy. How’s that for a cost shift?
These and other mandates increase Colorado premiums by 21 to 54 percent, reports the Council for Affordable Health Insurance. This dwarfs the one-percent increase attributable to the uninsured. Colorado’s Chief Medical Officer told the Washington Post that 2,500 Coloradans lose insurance for every one percent increase in premiums. These controls also reduce wages and studies show them to be responsible for up to 25 percent of America’s uninsured.
Compulsory insurance further empowers politicians to determine what insurance is best for you. For example, the Boston Globe reports that under the Massachusetts plan, “more than 200,000 people with health insurance would have to buy additional coverage to meet proposed minimum standards under the state’s new health insurance law.”
When government controls increase insurance costs, the young and healthy drop coverage first. Those remaining have a higher medical risk, so premiums rise again, which again drives out the healthiest remaining customers. Reformers have some nerve to support policies that make insurance prohibitively expensive, and then make criminals of those who do not buy it.
Compulsory insurance is based on collective punishment, a perverted form of justice. It punishes both the insured and uninsured for the misdeeds of politicians. Colorado legislators should not scapegoat the uninsured for the mess they’ve perpetuated. They should repeal legislation that inhibits the free market from delivering affordable high-quality medical care.
