What’s the Point of Insurance if it’s Not Socialism?

This post is derived from a conversation I had on Facebook with a middle-aged Californian.

Q: What’s the point of insurance if you can’t force people to cover treatments they’ll never use (e.g. charging men for women’s birth control pills)?

A: Are you saying that you do not understand the difference between managing risk and redistribution of known costs? I can explain this to you.

Think about how your car insurance works. It insures you against collisions and the associated liability- a situation that has a low chance of occurring, but is associated with high costs. When you pay your premiums, you are buying the mitigation of risk. If you have a 5% chance of incurring $20,000 in damages each year, then your customer group is costing the insurance company an average of $1000/year. So they charge you $1170/year, spending 15% on bureaucratic overhead, and walking away with a 2% profit margin for the service of converting your individual risk into a certain, statistically-weighted charge.

But in situations where the chance of a cost being incurred are either 0% or 100%, it makes no sense to buy insurance. If the chance is 0% (e.g. the chance of a man needing an abortion, or the chance of a woman needing Viagra), then your risk is zero, and the insurance company has nothing to offer you on that plan. If the chance is 100% (or you have control over the event’s occurrence), such as with birth control pills that you know you want, or that vasectomy that a guy chooses to get at a particular time in his life, then the premium cost associated with the service will be the cost of buying it without insurance, plus 15-30% bureaucratic overhead, plus 2-5% profit. In these cases, you already have complete control over the costs, yet you’re paying the insurance company extra to manage no additional risk. Financially, this is not a smart decision.

However, you seem to want people who have zero risk to share your known (100% chance) costs. This is not insurance. This is known as “social ownership” of costs. Social ownership is always advantageous to those who spend more and contribute less, and disadvantageous to those who are more responsible with their cost-management. There are only 3 cases I can think of where this sort of arrangement happens voluntarily for a long term: marriages, corporate ownership, and socialist communes. These arrangements only survive if they are very selective about who is allowed to participate, and have established mechanisms for removing (divorcing) members who take advantage of the contract without contributing much in return. Otherwise, the best members will always leave first, collapsing the arrangement.

When you use government force to mandate social ownership of costs throughout an entire society, that is known as “socialism.” In this case, there is no check on the behavior or character of participants. There is no mechanism for removing bad actors from the arrangement. It’s like being stuck in 300 million bad marriages all at once…unless you’re the one being a bad partner. This system violates the human right of free association, incurs unnecessary bureaucratic overhead costs, reduces productivity, reduces innovation, and ultimately reduces prosperity for everyone involved.

So if you’re seeking social ownership, insurance companies are not the institution you’re looking for. Let insurance companies sell insurance, and get your desire for social ownership fulfilled through family, communes, or (if you think your desired organizational structure is more efficient than existing companies) start a corporation. Don’t try to force insurance companies to be something they’re not, and don’t try to force us all to participate in a social ownership plan that some of us really don’t want to be a part of. Involuntary association of that nature will only make us all poorer.

UPDATE: She responded that I was “mansplaining” to her, and argued that because birth control “is a basic part of health care,” insurance must cover it, completely ignoring my argument. Logic and reason doesn’t get through to these socialist idiots. They only understand the fear of having their own smears turned back against them. So I called her a bigot for trying to use my gender to demagogue me into silence through that misandrist term. That’s when she “lost interest” in the conversation…meaning she no longer had any way to maintain dignity while making her argument. This is just about the best outcome that can be hoped for with people like this- they’ll never admit they’ve lost the debate, but they’ll be too embarrassed to make those arguments in public again.

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5 Very Stupid Beliefs About the Hobby Lobby Ruling

1. The Supreme Court doesn’t understand science/economics/women’s needs!

  • NO. That is stupid, and you are stupid for thinking it. The Supreme Court’s job is to interpret law, not write it or make policy. All they have said is that the contraception mandate is not legal because it contradicts the Religious Freedom Restoration Act (RFRA), passed (nearly unanimously) by Congress and signed into law by Bill Clinton. It would be illegal for the Supreme Court to change the law from their bench.

2. Hobby Lobby is denying women birth control!

  • NO. That is stupid, and you are still stupid for thinking these things. All Hobby Lobby has done is stated that they will not pay for 4 kinds of contraception (while happily offering to pay for 16 others). Nobody is stopping you from going to the store and buying that contraception yourself.

3. I have A RIGHT to make others pay for my contraception!

  • NO YOU DON’T. That is stupid, and you are a horrible person for believing that. You don’t have a right to make anyone else pay for ANYTHING for you. Well, unless you’re an infant and you’re asking your parents to take care of you. Are you an infant, and you need breast milk from your Hobby Lobby Mommy? The foundation of civilization is voluntary interactions and transactions. Can you imagine a society where I could come up to you and demand that you buy me a new car, and claim you’re violating my rights if you don’t? Yeah, that’s what you’re doing here. Stop being a greedy asshole trying to take things from others and learn to take care of yourself and interact with others on a voluntary and respectful basis.

4. Hobby Lobby is FORCING their religion on me!

  • NO THEY AREN’T. YOU are in fact trying to force YOUR beliefs on them by FORCING them to buy birth control that violates their religion, and then FORCING them to give it to you. How would you feel if they were forcing you to buy rosary beads and communion wafers and Pope hats and cross-shaped wall-hangings to give to them? Then you would see this for what it is. Don’t you DARE try to tell me “It’s DIFFERENT” when you’re on the other side, you hypocritical weasel.

5. Hobby Lobby still covers Viagra and vasectomies, so they’re DISCRIMINATING!

  • NO THEY AREN’T. I don’t know if there’s a female analogy for Viagra, but the comparable analogy to vasectomies is getting your tubes tied, which Hobby Lobby covers. In fact, Hobby Lobby covers far more contraception options for women than for men. I don’t see them handing out free condoms and spermicide to all the men. HEY OBAMA, WHERE’S MY CONDOM MANDATE!?

8 Ways to Obtain Contraception Without Violating Everyone Else’s Liberty

Here is a non-exhaustive list of the ways contraception can be obtained without violating the rights or liberties of others:

  • Pay for it out of pocket.
  • Split the costs with your significant other.
  • Buy a health insurance policy that voluntarily covers it.
  • If your employee health plan does not cover it, negotiate with your employer for contraception coverage.
  • If your employee health plan does not cover it, negotiate with your employer to be paid in cash, rather than medical benefits, and then use that cash to buy the medical benefits of your choice.
  • If your employer refuses to pay you in cash, campaign to remove the government regulations requiring your employer to pay you in benefits instead of cash.
  • If your employer refuses to pay you in cash, campaign to remove the tax benefits your employer receives for paying you in benefits instead of cash.
  • If your employer continues to refuse to pay you in cash after all government incentives against it have been removed, search for a different employer who respects your personal choice a little more.

And here is a list of the ways to obtain contraception by violating the rights and liberties of everyone else:

  • Campaign to use the force of government with the threat of taxes, prison, or violence, to mandate others to buy you contraception.
  • Steal it, or the money to buy it, with your own hand.

Yes, ladies, this same logic applies to Viagra as well.

Obamacare Infographic

Infographics are often a great way to explain complicated concepts without walls of text.

Here’s a good one that was shared with me describing some of the fundamental technical problems with Obamacare.
Colors to Die For
Source: Healthcare-Administration-Degree.net

Obama Administration Debates Dying Cancer Patient

Obama’s senior adviser, Dan Pfeiffer, just called a terminal cancer patient a liar, blaming her insurance company for being driven out of business by Obamacare.

At least Obama wasn’t lying when he said, “I’m really good at killing people.”

Will Single-Payer Solve the Obamacare Problems?

The popular response among progressives to the Obamacare trainwreck (higher costs, dropped coverage, incompetent mismanagement) is to suggest that all of this would be better if we had just enacted single-payer (i.e. nationalized/socialist) health care in the first place. But do you really think the same government that was too incompetent to manage a website and run the health insurance industry will be competent enough to run the entire health care industry directly?

If you nationalize all of this, those additional costs that Obamacare created through centrally-mandated inefficiencies won’t just go away. They’ll get worse as the government takes more of the decisions away from the health industry professionals, replacing their time-tested judgements with those of politicians. The only thing that will change to make anyone’s life easier is we’ll be paying for it through taxes rather than through insurance companies. But shuffling the costs around like that doesn’t make them go away. We will have to pay those costs, or our country will default, and then we’ll all be facing total economic devastation.

Socialist health care doesn’t fix fascist health care. It only sweeps the costs of inefficient centralized management under the rug and pretends they aren’t there.

Obama Lied. 93 Million Health Plans Died

Obama has said it time and time again, most recently saying it in September, 2013: “If you like your doctor, you will be able to keep your doctor, period.  If you like your health care plan, you’ll be able to keep your health care plan, period.”

But it was always a baldfaced lie. Still, Jay Carney recently tried to move the goalposts by saying that “only 5% of Americans would be affected” by the insurance-cancelling provisions of Obamacare. He didn’t move them quite far enough, because Obama’s administration knew as far back as 2010 that 93 million Americans would be at risk of losing their health insurance under the Obamacare bill they had just passed.

Yet Obama kept lying, and lying, and lying, and is still lying. He used the media strategy that got him off the hook for so many other lies: He denied knowledge, moved the goalposts, and then blamed the private sector and the Republicans.

But the real question is, are you as stupid as Obama thinks you are? Do you really believe that he had no idea that 93 million health care plans would be at risk from his signature law, even though we have it on record that his advisers told him? Do you really believe he had no idea the Obamacare exchange system was in trouble before the launch? Do you really believe he had no idea his NSA operations were spying on every American, as well as dozens of foreign leaders, including our closest allies? Do you really believe Obama had no idea why the National Park Service was closing down roads, lands, and private businesses that do not require federal funding to remain open during the shutdown? Do you really believe Obama had no idea his IRS appointees were engaging in illegal political harassment and intimidation to help him get reelected? Do you really believe Obama had no idea that the Benghazi attack was carried out by Al Qaeda? Do you really believe that Obama had no idea that his gun-running operation had gotten out of control and killed 300 people?

It’s no coincidence that Obama’s relationship to all of these incidents is similar. It’s called “plausible deniability.” He knew about all of it. And he lied, shamelessly and repeatedly, to avoid all responsibility. Let the subordinates suffer so the head of the operation can continue on. It’s the Chicago way.