I tried. I really did. I resolved not to make a post about the Supreme Court’s decision in the Hobby Lobby case. But in the end I couldn’t resist.
Don’t judge. You’ve read umpteen posts about the decision, yet you still clicked on this post to read it. It’s OK, though. I forgive you.
I have seen some crazy stuff on the web about this case in the last 24 hours. On the other hand, I’ve seen some calm and well-reasoned commentary as well, and one reason I’m posting this is to encourage others to visit those sources.
Several folks have argued that this whole situation is one of the long-term results of World-War-II-era wage and price controls, and I think they are correct. The reason employers first started offering heath insurance was to get around wartime controls on wages, and that “fringe benefit” became accepted as normal and eventually (under Obamacare) mandatory. But there’s no sound reason why we should acquire insurance from our employers any more than we should acquire groceries, transportation, or housing. In fact, the frequency of people’s changes in employment these days is a great reason why we shouldn’t look to employers for insurance. Now every time you change jobs you have to go through the underwriting process again, along with waiting periods and the threat of a “preexisting condition” being discovered. Wouldn’t it be much simpler to get underwritten one time when you reach adulthood for a policy you could maintain through job changes and the development of medical conditions?
Another fundamental problem not addressed by the Supreme Court’s decision in this case is the corruption of the English language, specifically the torturing of the term “insurance.” The concept of insurance is and has always been the management of risk. The purchaser of insurance (whether life insurance, property insurance, health insurance, or whatever) transfers the risk of a loss to a third party for a fee. If the loss occurs, the policyholder is protected; the insurer pays out. Here again Obamacare worsened an already bad situation by requiring all “insurance” plans to pay for all sorts of health-care services that are not insurable risks. These services are primarily preventative, such as annual physical exams and, yes, contraception. Their function is like the fire extinguisher you may have in your house; they reduce the risk of the loss’s occurring. In a properly functioning insurance market, these services would be paid for by the policyholder and would probably result in lower premiums on the policy because the insurer wants to incentivize them. Instead we have a system that is as much prepaid health-care services (whether you want the services or not) as it is insurance.
Within the context and assumptions of our stupid system, people who see contraception as a basic medical cost have a gripe with the decision that needs to be considered seriously. After all, they may now be forced (if they don’t want to pay the IRS penalty) to purchase an “insurance” policy (at Obamacare rates, no less) that doesn’t cover what they see as a basic necessity. However, this is not a knock against Hobby Lobby and other employers with religious convictions, who also have a legitimate interest in not being forced to pay for something directly that violates their conscience. It’s a knock against the law that has politicized what to most people are very personal matters. Dan McCarthy explains further.
The problems with our health-care system and our cultural conflict go way beyond anything addressed in this court case. This decision is a blip on the map. Personally, I think it was a good blip, but the reactions I’ve seen don’t give me much confidence that the big questions are going to be addressed reasonably and respectfully in our public discourse going forward.
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Spot on. It’s refreshing to hear a sane and calm view about this mess. Everyone gets so mad, and doesn’t know what they’re talking about.
This is a magnificent post. Even handed, logical, rational. I wish people would think and reason in such a way.
Yes. Very well done, my friend.
I enjoyed your post. However, I wanted to point out there is an excellent reason to have health insurance provided by employers. When insurance companies insure groups of employees, they begin to avoid the problem with the “Market for Lemons” (please see its wikipedia page) that presents itself in the health insurance market.
I hope I can explain. People who want insurance most are the types who have the most risk. Too many risky people on an insurance plan drives up the cost, driving out the less risky people who don’t need insurance as much. This drives up the cost more, driving out all but the most risk-filled (and most expensive to insure) buyers. This problem could prevent insurance markets from working efficiently (or at all). However, if the insurance company sells to groups of random people (as far as risk level is concerned), they can prevent their plans being swarmed by high risk buyers. All the employees at a company present a reasonably random group. If insurance companies couldn’t bundle their services with an employee’s benefits, they wouldn’t be able to cover nearly so many people.
Bob, thanks for your comment. I am familiar with the concept of the death spiral, but I don’t see why it would necessarily be the case that the health insurance market would enter one in the absence of employer-provided insurance as long as the insurance companies can price the risk appropriately. Now obviously if the government mandates a one-price-fits-all phony-baloney system it would be a different story, but I’m talking about an insurance market where someone will be charged on the basis of what the actuaries say. If you’re underwritten in early adulthood and get a rider where coverage cannot be canceled or increased beyond X% if a condition develops, I think the kind of problems we see today would be significantly reduced.
Why wouldn’t other groups form in order to spread the risk? In fact, they already have, in the form of various religious & christian groups that sell health insurance today.
So this term, death spiral came about in 1998. But health insurance has been around much longer than that. Has this theoretical concept actually occurred? If so, what were the conditions? Were there price controls? How were insurance contracts written in regards to dropping coverage?
If health insurance contracts were available that persisted across job changes, it seems to me you increase your chances of finding coverage that prevented insurers from suddenly dropping you. After all, insurers WANT to sell you this product. Are buyers not savvy enough to look at the contract and make an informed decision? Keep in mind that HR personnel have been looking out for your coverage for decades. This would obviously need to change.
As long as health insurance buyers don’t bare significant cost of premiums and care in general, prices will spiral out of control. This seems to me to be the elephant in the room.
Health insurance is (or at least is suppose to be) an economic problem and a matter of risk management. Economic problems are problems regarding allocation of scarce resources. It seems to me that there are many whose desire it is to somehow magically eliminate this problem. This is not possible. The resources are still scarce and you can’t make the scarcity go away.
The wikipedia page for “Death spiral (insurance)” is very informative.