Thursday, February 9, 2012

Holy Insurance

So, apparently, the administration wants all employers, including, say, Catholic charity hospitals, to cover the cost of contraceptives, birth control devices etc for their employees.

In the process of searching for a public statement on this issue, I was able to find a video of Mr. President shooting marshmallows. Awwww! He's so cute when that expression of wonder and amazement takes over his face!

So, I read a statement posted on the White House blog by the Director of the Domestic Policy Council.

Ms. Muñoz writes:

Thanks to the Affordable Care Act, most health insurance plans will cover women’s preventive services, including contraception, without charging a co-pay or deductible beginning in August, 2012. This new law will save money for millions of Americans. But more importantly, it will ensure Americans nationwide get the high-quality care they need to stay healthy. Under this policy, women who want contraception will have access to it through their insurance without paying a co-pay or deductible. But no one will be forced to buy or use contraception.

Oh, boy! Am I glad … no one will be forced to buy or use contraception. Like, seriously, dude?!

If you are one of the seemingly dwindling number of those of us who knows anything at all about insurance and are not scared of basic arithmetic you are already shocked. See, you don't need to bring in any appeal to anything holy to understand why such a mandate imposed by government is incompatible with the idea of insurance.

What is insurance?

Insurance is about large losses that occur with some probability that can at least be inferred. Let's say, every year, 100 out of a million people in a country are diagnosed with a disease that costs $1,000,000 to cure. So, we can say the probability that a randomly picked person is going to be diagnosed in a particular year is 100 / 1,000,000 = 0.01%. The expected cost of treating all of them is $100,000,000. The financial burden of being diagnosed by this illness might be devastating to a given individual.

Given the choice, between paying, say, $500 annually for an insurance policy covering all the costs of treatment if one is diagnosed during the year versus having a 99.99% chance of not having to shell out any money and a 0.01% chance of financial disaster, most people would choose to incur the $500 cost of the policy. (To be sure, that kind of premium would indeed enable the insurance company to cover the payout in almost all states of the world, and, more often than not, they would make out like bandits.)

That's what insurance is: You give up a small amount with certainty in return for the assurance that the big loss with small probability hits, someone else foots the bill.

Now, the administration already is hacking away at the insurance market with the whole preexisting conditions dogma: It only makes sense to sell insurance to someone before that person is hit with a loss. Why would anyone give someone $1,000,000 in return for $500?! But, that was one of the first steps the Shoveler and his pals took to destroy the health insurance market.

Coming back to our contraceptives … First, note that contraceptive use is not a random event.

It's a choice.

When an insurance plan is required to cover contraceptive use, that means paying for something which some people use with 100% probability on a continuous basis due to their choices.

When someone else pays for something that you choose to buy for certain, that is not insurance.

This is just as stupid as requiring auto insurance to pay for the gas people put in their cars. The only effect of that would be to force people who use less than average amount of gas to pay for those who use more than the average amount.

That's a subsidy, not insurance.

Religious Freedom

Here is where the founding principles of the United States of America come in.

The per person cost of such "coverage" will be the average amount spent on contraceptives by the plan enrollees plus a portion of the administrative costs of the plan.

People who do not use contraceptives will pay for the contraceptive use of others who do.

OK, this is no different than the gas case, you might say, what makes this about religious freedom, any more than the government requiring me to pay for someone else's gas consumption.

A lot of people of a variety of religions believe some or all forms of birth control are against their fundamental values. Under the administration's rules, all people who obtain health care insurance coverage through their employers are going to be forced to subsidize the contraceptive use of others. That is, people will be forced to pay for others to be able to do something against their religious beliefs.

While right now, most of the reaction is coming from Catholic organizations, make no mistake about it, if such a policy is allowed to stand, even with an itty-bitty exemption for religious organizations, the rights of everyone will have been violently violated.


  1. Good post Sinan. Any and all progressive policies violate citizens' rights. This is just the latest example.

    Is it only me, Sinan, or do you also feel like you are being suffocated by these collectivists? These past three years have particularly cemented in my mind the fact that the collectivists cannot possibly co exist with us. And, it is not only Democrats, but also many Republicans. The two ideologies (collectivism and individualism) are so diametrically opposed that one must simply destroy the other to exist. The only middle ground is semi-collectivism that we live in. There is no such thing as having some of your rights intact. Once you give some up, it is simply a matter of time before rest of your liberties are taken away. Absent political reform (and I mean complete reform where politicians become irrelevant and powerless to enrich or empower themselves in any way), that is the direction we are headed in. The past 100 years since Wilson struck the first significant blows, has seen the car (that is the constitutional republic) head for the proverbial cliff. Well, the front wheels are now off the cliff and the whole car is about to plunge down the bottomless pit that is collectivism.

    There is ONLY one long term solution: the US must split in to two nations that are shaped by their ideological convictions. Those who want to live in a meritocracy and those who want collectivist statism. Nothing less will save us because the latest figures on government dependency show that the scale is about to tip from the producers towards the leaches of the society.

    Make no mistake, we are about to become the second Roman Empire of human history. A truly sad statement, but as I see it, an accurate one.


  2. In concrete situations, most Americans understand the evils of orders from the top for the "good of everyone." We only need enough people to be able generalize into stupid abstractions politicians like to employ. For example, this issue is not about whether people should have access to contraception -- it is about whether the government has the right to require me to pay for someone else's contraception or, for that matter, eye exam, or even doughnuts, through a private transaction with a private company.

    I think this is straightforward for most people to see through. And, compared to the coming eruption of world wide trouble, is something we can easily figure out. Who would a thunk it? Moi, the eternal optimist ;-)

  3. Hit the nail on the head, Sinan. There is a good chance that 1930s will look like the roaring 20s compared to what looks like might happen (both here and abroad). Further complicating factor is that we may have a major war brewing in the ME (Israel and Iran). If that happens and is am extracted one, we may be looking at astronomical oil prices.

  4. I agree completely, this is a subsidy not insurance.

    What I don't understand is why the Democrats would do this? Sure they have ideological leanings in this direction, but birth control is overall pretty cheap... so it's a paltry subsidy. What's more, working Catholics (e.g. from Irish background, or Hispanic background) tend to be a large chunk of the Democrat base (because of union connections, or they think the Democrats will tax the rich), but also somewhat conservative in their thinking (they still believe in hard work for example).

    The success of people like Rick Santorum and Marco Rubio would have to be a big red flag warning; pissing off the Catholics will not be a winning strategy for Obama.

    Personally, I don't really care about offering a subsidy to someone else for birth control... it doesn't freak me out. But then, I'm not Catholic either.