My brother and I were talking on the phone today, and he pointed out that the current health insurance proposals from Clinton, Obama, and even McCain all have one thing in common: they require that everyone buy health insurance. Thus, everyone will be covered. The problem with this is: what if you refuse to buy health insurance? Will you get penalized? Put in jail? In most states auto insurance is required. If you don't have it, you will get fined. If you get caught enough times not having it, you will go to jail. What's going to happen if you get "caught" without health insurance?
When the states started pushing for mandatory auto insurance, they argued that insurance rates would go down. Naturally, nothing of the sort happened. Prices in fact went up. It's simply the law of competition. If you are an auto insurance company in a state where it's not required, you have to compete with paying $0. That's a pretty low price to compete with. Thus, you have to have low enough rates to convince people that insurance is cheaper than no insurance. When insurance is mandatory, however, the government creates and enforces a cartel. Thus, prices go up -- as indeed they did.
Basically, this is all being done at the behest of the insurance companies, who are looking to force more people to get insurance -- so they won't have to compete with $0. This would be like the government passing a law that required that everyone buy a dozen eggs a week, no matter if you needed or even wanted eggs. Maybe you're a vegan. No matter. You have to buy them anyway. What would be the result? Naturally, the egg farmers would be happy. Not least for the fact that egg prices would go up. This would be in part due to supply and demand, but it would also be due to the fact that the egg farmers could set high prices, and there's nothing anyone could do about it. You have to buy eggs every week, by law.
So the proposed solution to the "health insurance crisis" is to force everyone to buy insurance. Can't afford it? Too bad. Don't need it? Who cares? So long as we have 100% coverage. Who is this designed to help? The insurance companies. Who will it hurt? The poor. Naturally, one should expect this to cause more problems that the government will be force to come in anf fix -- most likely though some sort of nationalization scheme.
7 comments:
The government won't be able to mandate you have insurance without amending the constitution (to eliminate the appointments clause among other things). However, they can tax you more, say, by eliminating the personal exemption. Insurance would still probably not be economically viable but it is unclear what further steps the government would take to coerce compliance.
I should add that this insurance is far more henious than auto insurance, which is only required to protect other people to a minium degree if driving on a state road. This is more of a tax on being alive, but perhaps not much different from the income tax in general.
I wish it were true that the Constitution was a barrier to the U.S. government doing this, but I suspect it's not. How many other things does the federal government do that are patently unconstitutional (violating the 10th Amendment, for example)?
Regarding the "Health Insurance Fraud" article, I have some comments. You mentioned the insurance industry is in favor of the auto insurance laws. State Farm Insurance, for example, is opposed. Type the following into the yahoo search engine: "715 Insurers Quietly Oppose Mandatory Auto Insurance"
Also, go to www.foodstampstudy.com to see two studies in which I have evidence that the mandatory auto insurance laws are causing an increase in food stamp nrs. (Hank Hudson of the Montana DPHHS doesn't know what he is talking about)
Dr Robert Maril has done another study in which 44% of the respondents said they could not buy food or pay rent due to mandatory auto insurance. Type the following into the yahoo search engine: "The Impact of Mandatory Auto Insurance Upon Low Income Americans"
I feel there will also be an increase in food stamp nrs, rent delinquencies if medical insurance is mandated. Don Birkholz, Broadus, MT
I was referring to health insurance companies, but it was also true with auto insurance -- though I am glad to hear that State Farm and a few others are now against it. I do wonder why they are opposing mandatory insurance "quietly," though. My suspicion is that they are only recent converts to opposing mandatory insurance, after they found out that it causes fewer people to insure fewer cars. I do love that the report here has the insurance company saying people shouldn't have to choose between eating and having a car with insurance, and a Democrat threw a fit over it. Here we have a company more concerned about people than a Democratic state senator -- not that I'm really all that surprised.
Dear Dr. t: I think the main reason State Farm does not like mandatory insurance is that they do not like the states to arm twist the high risk drivers (three time DUIs, etc) into their insurance offices, and they would prefer to insure the safe drivers only.
In South Carolina, they passed a law mandating that if you had a driver's license and you walked into an insurance office, they would have to sell you insurance.
Result: 90% of the insurance companies quit selling auto liability insurance. I have heard that in Massachusetts there is so much regulation of the insurance industry it is getting hard to find a company selling auto insurance.
But, whenever there is a bill to increase the penalties for no insurance, involving the insurance industry being required to do random sampling, you generally see insurance opposition.
I see the author of the initiative in California to increase the penalties for no insurance (Poisner?) has pulled the initiative due to adverse reaction of a low income group (Greenlining Institute)
TKS
Everything you mentioned are also factors. The bottom line is that it's bad for the insurance companies and bad for the consumer as well. Especially if you're poor. The insurance companies only recently came on board with those of us opposing mandatory insurance, though -- because they only recently learned the hard way of all the problems with it for them. Health insurance haven't learned this lesson yet, which is why one of the largest contributors to Clinton's campaign has been health insurance companies.
Good words.
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