Re: Appeals Court holds that Obamacare contraception mandate violates First Amendment
posted at 11/4/2013 12:33 PM EST
In response to A_Concerned_Citizen's comment:
Pull your skirts down ladies, your ignorance is showing again.
But health insurance doesn't just allow individuals to turn risks into fixed expenses. It is also designed to shift costs across individuals, away from the sick and toward the healthy. If you have foreseeably high health costs, your health insurance premium will be less than your expected claims; if you're likely to be healthy, it will exceed them.
This system is a kind of shadow fiscal policy, redistributing income from the healthy to the sick. It can only work if consumer choice is restricted in such a way that many people are induced to buy policies that cost much more than they can expect to get back. Obamacare contains many such inducements (including subsidies and the individual mandate) but so does the pre-Obamacare status quo in health policy.
State health insurance regulations turn insurance into a tool of shadow fiscal policy, shifting costs from the healthy to the sick, with the extent of the redistribution depending on the state.
Redistributive public policy is even more of a theme in the group health insurance market, which is nine times larger than the individual market and the dominant source of "private" health coverage. The government massively subsidizes this market by excluding employer-provided health benefits from income and payroll taxes. Federal tax advantages for health insurance add up to $300 billion a year.
These tax subsidies are highly coercive. Take a family with salary income of $60,000 and a health plan worth $15,000. If this family instead took all of its income as $75,000 in cash salary, it would face an income and payroll tax hit of around $4,500, or about 6% of their income. For comparison, the individual mandate penalty in Obamacare will be limited to 2.5% of income....
That's a summary of the "private" health insurance system we have today: Subsidize and regulate to push as many people as possible into insurance pools, and shift costs among them so the healthy subsidize the sick.
This reflects the fact that health insurance is not really a private product but a government program creating winners and losers, and the terms of the debate are about who will win and who will lose. Democrats want the poor and the sick to win. Republicans want people with existing coverage and high tax rates to win. Neither side is calling for a free market.
If your two sides are the mainstream republican party and every liberal on the face of this country, then you are right, no one is calling for a free market.
Conservatives, however, are calling for a free insurance market, at least freer than what preceded OBamacare. this is what is behind the torte reform and selling insurance across state line mantra, free-er markets.