Mandates Aren't Gifts

Some laws mandate that certain organizations (employers, insurers) do certain things (offer benefits, cover certain treatments/illnesses). Such mandates are erroneously called “protections” by people who insist on describing government policy in terms of the desired effect rather than the actual effect.

People with “pre-existing conditions” would be much better protected in a world where insurers could price for the risk and issue policies with coverage exclusions. They would be better protected if government policy didn’t encourage or mandate that employers provide health insurance to their employees. If a real insurance market were legalized and allowed to operate, premiums would be affordable, the insurance payout trigger would be the diagnosis itself (not the treatment that occurs in the ensuing years or decades), and insurance terms would probably be much longer (as they are for life insurance). The concept of a “pre-existing condition” wouldn’t even exist: anything catastrophic enough to make premiums unaffordable would be covered by the insurance policy that was effective at the time the injury was incurred or disease discovered (much as how auto bodily injury coverage actually works in the world today). Serious healthcare reform would remove these “protections” that prevent a real insurance market from operating. I doubt if we’ll see it soon, and part of the reason is the demagoguery surrounding heath policy.

I see even smart people fall for this. Stop doing this, guys. You are trying to frame this in such a way that nobody could possibly oppose your favored policy, even though it has some obvious flaws. (Who could be against "protecting people with pre-existing conditions?”) It makes a person look really obtuse, as if they don’t realize that their favorite policies might have a down-side. As if they don't even realize there might be an argument for some other policy.

Some people think of a “mandate” as a transfer from one party to another, and the removal of a mandate as a transfer in the opposite direction. If we mandate that employers provide insurance benefits to their workers, what we’re actually doing is telling employers, “Pay your employees lower wages/salaries, but use the balance to buy them insurance.” If we mandate that insurers cover something routine (like annual checkups and birth control), what we’re actually doing is saying, “Charge your customers higher premiums, then give them some of that money back when they buy routine medicine.” I see almost no awareness of this incredibly basic economics (arithmetic, really) when I see discussions of mandates on the news or on my Facebook feed. There might be a good argument for certain kinds of mandates, because some kind of market failure exists. But it seems to me that people reflexively see the addition of a mandate as favoring the worker/customer at the expense of the employer/insurer. This is wrong for the obvious reasons outlined above. If people have a more sophisticated “market failure” argument in mind, they aren’t sharing.