Monday, April 09, 2012

Statism, insurance, and dependency

I'm back! I apologize for my absence; a combination of personal business, actual work, and my old motherboard's treacherous decision to stop working have been keeping me away from this blog for much too long.

One of the things I've been following in the news is the controversy over requiring employer-provided health insurance policies to cover birth control pills in the face of objections from employers who are morally opposed to birth control, most notably the Catholic Church and other Catholic institutions. I am opposed to laws that make an insurance policy illegal because it doesn't cover everything the government thinks it ought to, so I'm on the anti-mandate's side as far as the substantive policy question of whether or not employer-provided insurance should be required to include contraception is concerned.

My reasons for that belief are already well-expressed in Sheldon Richman's articles on the subject at The Freeman here and here, so I'll not reinvent that wheel. There something else about this controversy worth commenting on, however.

One of the most conspicuous elements of the whole controversy is the conflation of government- mandated provision of birth control by insurance companies with access to birth control, and the lack of such a mandate with actively preventing- or allowing employers to actively prevent- women from acquiring it. (This article at Salon is nicely representative.) This is not surprising, since many people have an extremely state-focused conception of human life and society that elides the difference between not having something provided by the government and forcibly depriving people of it. In this case, however, I think there's an additional factor at work fueling the conflation. Namely, what do Americans typically mean when they talk about health “insurance?”

The purpose of insurance is, or at least was, to reduce risk- you pay a relatively small, predictable cost on a regular basis to protect yourself from the financial consequences of large, unpredictable losses.

In purely dollar terms, this is a losing proposition, since over a lifetime you're much more likely to pay more money than you receive. However, certainty and predictability have value in themselves. Eliminating or at least reducing the risk of sudden, unpredictable losses make it easier to form and execute long-range plans, and of course there are also psychological benefits. Additionally, the declining marginal utility of money means that the difference in lost well-being between a small financial loss and a large one can be many times greater than the difference in dollars.

Now, what's conspicuous when considering birth control pills in light of the above is that it just doesn't make much sense for them to be covered by insurance, especially if they're actually being used for birth control. They are a regular, predictable, and (compared to treatment of many serious illnesses or injuries) relatively minor cost, and the condition they are most commonly used for is highly predictable- being a sexually active female of childbearing age isn't an exotic disease.

That's not unique to birth control, by any means; many medical goods and services covered by insurance share these qualities. There's no risk of financial loss being managed- bringing insurance into the picture just adds an extra pair of hands that the consumer's money passes through before she gets the product. (Or, if the cost is not ultimately borne by the consumer, simply gives a pseudomarket veneer to what is essentially a government welfare benefit.)

This outcome is not the product of a free market, and would almost certainly not occur in one. There are tax benefits to paying employees part of their compensation and health insurance instead of money, so many employers do precisely that. Wages that travel from the employer to the employee to the healthcare provider are taxed, while wages that travel from the employer to the employee to the employer's health insurance company to the healthcare provider aren't, so it makes makes sense to pay for things that aren't really insurable through insurance companies despite the cost of adding a middleman. Some jurisdictions push this further by actually punishing employers above a certain size that don't compensate their employees in this fashion. Once the recent health "reform" legislation goes into full effect, that will become the case nationwide.

Further, every state has a list of things of things that an insurance policy must cover, many of them quite extensive, and policies without them are illegal, so even if you are buying insurance yourself an insurance policy that is limited to actual insurance rather than serving as a middleman for regular healthcare expenses isn't an option. Since insurance coverage is not the magical money fountain many people seem to think it is, this tends to make it more expensive.

And meanwhile, the huge amount of healthcare consumption filtered through third parties combined with huge amount of medical spending paid for by government benefits drives up consumption and reduces sensitivity to cost- and thus incentives to control those costs- by weakening the link between how much a person consumes and how much it cost them. Which makes health care in general more expensive and the cost of treatment for serious illnesses or injuries even more potentially ruinous for the uninsured.

Those are some of the economic effects government intervention has had on healthcare in the United States, which many people have previously pointed out. What doesn't get mentioned much are the cultural effects, which I think are being demonstrated in the birth control mandate controversy. (And in many debates over health care in this country in general.)

In short, health insurance is now seen not as a way of managing the risk of unexpected medical expenses, or even as a way of paying for medical expenses in general, but as the thing all medical care comes from. Insurance is so pervasive in the healthcare system that the two are commonly seen as inseparable, or not even seen as distinct concepts at all. This pervades political arguments for the subject, with having “insurance” routinely treated as interchangeable with having access to medical care.

(Now, if you were to ask someone who thinks this way, point-blank, if it's possible to buy medical care directly, they'll no doubt agree that it is. But being aware of a fact when your attention is specifically called to it is not the same thing as having that fact in mind whenever it's relevant. Similarly, treatment and insurance are implicitly acknowledged as not being equivalent in arguments over the recently passed requirement that everyone buy health insurance, where the tens of of millions of poor souls who don't have proper health care because they can't afford insurance suddenly are able to afford it, and must be compelled to buy it so that they can't continue to leech off of the rest of the country by selfishly dumping the cost of their medical care- which they apparently have been getting, after all- onto the healthcare system. However, the inconsistency is almost never pointed out by anyone in the mainstream, and that bit of doublethink is largely allowed to remain safely sealed away in its own little bubble.)

In this light, the often bizarrely overwrought response to the idea of letting employers who provide insurance choose whether or not that insurance includes contraception- claims that this would interfere with or violate a woman's right to birth control, or that it would mean giving employers control of the medical and reproductive decisions of their female employees, or is somehow analogous to laws outlawing (as opposed to merely not requiring) insurance provision of drugs like Viagra- start to make a good deal more sense. After all, most Americans receive health insurance through their employer, something the government actively encourages and something the typical liberal/progressive supporter of the contraceptive mandate for insurance policies thinks the government should encourage, at least as a next-best solution if single-payer isn't on the table. (If I had a dime for every progressive complaint about how awful it is that this or that employer pays its employees with money rather than a combination of money and insurance benefits, I'd probably have enough money to make this whole issue moot by building my own pharmaceutical plant and just giving birth control pills away.)

In that context, if health insurance and access to healthcare are indeed one and the same, allowing employers to refuse to provide coverage for birth control actually is more or less equivalent to letting employers decide whether female employees are allowed to use contraception or not, and the claim that opposing mandatory birth control coverage is an attack on women's sexual and reproductive autonomy becomes much more defensible. Thus, while I still think much of the rhetoric to that effect is a matter of specifically political assumptions- that something not being done by government equals it not being done, period- a lot of it is probably cultural, and is the product of assumptions that are common among the public in general. Decade after decade, more and more people have been conditioned to think of health care as something that always comes through some sort of bureaucracy, either government or corporate, that stands between the consumers and producers of it, which the consumers of it are often utterly dependent on- and it gets harder and harder for people to imagine getting it any other way.

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