Sam Freidman with National Underwriter has rebutted a NYT column discussing the provision in some health insurance reform proposals that individuals be required to buy health insurance. Quoting Freidman:
Insurance only works—and it can only be affordable for all—if the spread of risk is wide enough. Thus, as long as healthy folk keep opting out, the pool becomes much smaller (and unaffordable) for all.
Left to their own devices, the public in general will not adequately look out for their own long-term financial health, whether its retirement or medical care or their own homes (note the inexplicable gap in flood insurance) at stake. That’s why one of the wisest moves ever made in this country’s history was to establish Social Security and mandate payroll deductions to pay for it. The program at least established a floor to support the elderly when they no longer work.
Maybe my inner cynic is dominant today, but I’m sadly inclined to agree with Freidman’s assertion.
I’ve been a firm believer in the notion that people should be able to make their own, personal financial decisions (and make their own mistakes) without significant government intervention.
I’d like to believe that most rational folks would opt to carry at least catastrophic health insurance and save money appropriately, given the opportunity and means to do so, as well as the knowledge of why such decisions are important.
I’d like to believe that the reason that some folks don’t make those decisions is because they either lack the means to do so…or they take risks because of failing to fully appreciate the gravity of that decision. That in turn suggests that beefing up basic economic/personal finance education in school would be a wise thing to do.
However, some days I’m also forced to recognize that there are a lot of dumb people out there. (And yes, on some days, I’m dumb in my own way.) It’s not that much of a leap from “people are dumb” to “government should protect those folks from their stupidity, lest I pay a bigger price from the aftermath of their unrestrained stupidity.
So, with a health dose of cynicism in place, it becomes very easy to stomach a state mandate to buy coverage.
However, I’m still uncomfortable with the slippery slope that we could start down if the state participation in actually funding the costs or bearing the risk passes a certain critical mass. At some point, it begins to become almost a fiscal necessity for the state to strongly discourage behavior that is perceived to jeopardize health. For example, imagine criminalizing fast food french fries due to the downstream effect that they can have on the state’s citizens’ health.