How mandatory insurance makes affordable insurance illegal
September 25th, 2009 | by Brian Schwartz |Life with mandatory insurance, from the Wall Street Journal:
Peter and Kirsten MacDonald of Brockton, Mass., are the kind of young, healthy individuals Massachusetts needs in the system to spread the risk and help pay for it. But the MacDonalds have calculated that they’re better off without coverage.
They bought their own insurance in 2006, after Mr. MacDonald, a 39-year-old computer consultant, lost his job and began to work as an independent contractor. Insuring the couple and their four children then cost $650 a month, or $7,800 a year, and didn’t include prescription-drug coverage. It was “a lot, but something we could afford,” Mr. MacDonald says.
The next year, premiums rose to $750 a month and to about $900 a month in 2008. The MacDonalds say their actual medical costs hadn’t come close to the premiums they were paying. “What are we getting for it?” Ms. MacDonald says they asked themselves before canceling.
David Henderson comments:
Notice that Mr. MacDonald is stuck in the American way of thinking of health insurance as prepayment of medical expenses rather than as true insurance. I’ve bought life insurance for the last 27 years. Yet I haven’t died. Should I be disappointed?
Back to the Journal article:
Now they put aside $750 a month to cover medical costs as they arise, plus the $1,068 penalty each adult would pay for going without coverage. The biggest expense came last year, when their then 4-year-old son, James, fell and cut the bridge of his nose. The five stitches and care of a plastic surgeon cost $2,000, which the MacDonalds said they were able to pay from reserves they’d set aside.
Mr. MacDonald said he’d be inclined to buy insurance if he could buy cheaper catastrophic coverage, but such policies don’t count in the Massachusetts plan.
Will the national government make your insurance plan illegal?
(via David R. Henderson)
tags: illegal insurance, mandatory insurance, Massachusetts health
