Tag Archives: House health care reform bill
A key requirement of the House and Senate health reform bills is that all Americans without employer or government coverage must purchase health coverage through a new insurance exchange. The reason is to avoid the ravages of “adverse selection” by “free-riders” who wait until they get sick to buy insurance and thereby bankrupt the system. This free-rider problem is at the heart of the market failure I’ve written about that prevents universal access to necessary, affordable health insurance.
In effect, insurance mandates are a required license to breathe. The often heard argument-by-analogy is that it’s no big deal, because we already require drivers to buy auto liability insurance. But driving is a privilege subject to reasonable public safety regulation and comes with the right to abstain—as 100,000,000 non-driving Americans do. Everyone breathes. Also, mandatory auto insurance is to protect the victims of drivers’ mistakes, not the drivers themselves. Car insurance mandates aren’t just irrelevant but also ineffective—14.6% of drivers still don’t buy it (similar to the 15.3% who lack health insurance).