Is mandatory insurance a tax?
Barack Obama recently claimed that requiring everyone to have health insurance, which is part of all of the health reform plans that have been considered recently by Congress, does not amount to a tax increase.
I agree with him, but only because I think that mandatory insurance is worse than a tax increase. Forcing people to have health insurance is degrading, unconstitutional, and unfair, it is a huge assault on our liberties, and it will make the cost of health services go up and the quality go down. I am categorically opposed to any health reform bill that includes an individual mandate, and I think that anyone who believes in liberty ought to be as well.
First, an individual mandate is degrading because the government is basically telling us that we don’t know what’s good for ourselves. There are two ways of paying for health services: getting insurance (paying a flat fee no matter how many services you get), or not getting insurance (paying separately for each service you get). These are two legitimate ways of paying, which people have a right to choose between. By requiring everyone to do the first option, the government is telling us that it doesn’t trust our judgement. Supporters of an individual mandate don’t believe it’s possible for someone to rationally choose to take the risk of paying out of pocket for any services they receive. Instead, they want to tell you that you don’t know what’s good for you – you’ll end up incurring medical expenses that you won’t be able to pay, even if you don’t think you will. That is paternalistic and insulting.
Second, an individual mandate is unconstitutional. Nowhere in the Constitution is the federal government given the power to require people to buy a product or service. The closest the Constitution comes to allowing an individual mandate is the commerce clause, which authorizes Congress “to regulate commerce with foreign nations, and among the several states, and with the Indian tribes.” This doesn’t come very close at all though – whether or not an individual person has insurance doesn’t really affect interstate commerce.
Third, an individual mandate is unfair. People who don’t need many health services have a right to not pay for many health services. They have a right not to get insurance if that is what makes the most financial sense for them. Forcing them to buy health insurance equates to forcing them to subsidize people who receive more health services. It is simply unfair to make people pay for things they don’t use.
Fourth, and pretty straightforwardly, an individual mandate shrinks our liberty. It eliminates the choice of whether or not to buy health insurance, something that people have every right to do because it hurts no one and is not immoral.
Fifth and finally, an individual mandate would make health insurance costs increase and quality decrease. Why? Well, in a free market, companies have an incentive to keep their prices as low as possible and their quality as high as possible. This is because if the product is too expensive or too low quality, people won’t buy it, and the company won’t make money. With an individual mandate, however, people don’t have the option of not buying the product. Therefore, health insurance companies can charge as much as they want and make their product as confusing and bad as they want, and they won’t lose any business because people are forced to buy it.
Here are some awesome posts from other blogs about the injustice of the individual mandate: