A Health Insurance Criminal Pleads His Case
If mandatory health insurance goes through, it will turn me into a criminal. I don’t have health insurance. I don’t want it. And I will refuse to buy it even though I can afford it. Before they lead me to the cell, perhaps the prisoner may be allowed to say a few words in his defense.
It’s understandable that politicians are eager to eliminate the medically uninsured. For years they’ve been told that we are the flies in the ointment of health care policy. It is said we are either a) wrecking the system by using services we don’t pay for, or b) deprived of needed medical care and therefore objects of pity and subsidy.
These points may apply to some uninsured but not to all. Some of us belong in what might be called the “successfully uninsured” category. We are not freeloaders. We believe we have an obligation to pay for the medical care we receive, and we always pay for it. I put no financial burden on doctors, hospitals, or taxpayers, and politicians are wrong to assume I am part of the country’s health care problem.
Politicians are also wrong to assume that I am an object of pity. Like many Americans, I have significant savings and can afford medical expenses out of pocket. (Census Bureau figures for 2000 show that over 18 million households had assets in excess of $250,000). Our savings make it possible for my wife and me to decline both private insurance and Medicare (we are 70). Those without savings are in a different situation: They probably need insurance, or a subsidy, or charitable help. My point is that if you can handle your own medical bills through savings and personal responsibility, this is a sound approach. Politicians should encourage this state of self-reliance, not criminalize it.
There are many advantages to being insurance-free. The first is flexibility. Several years ago, my wife had a serious bout with cancer. The successful treatment involved surgery and local radiation therapy. After much study she refused the more massive radiation treatment recommended by the doctor and pursued alternative therapies, including acupuncture, nutritional therapy, massage, and naturopathic medicine. Every decision was made in terms of what seemed best to treat this illness. We were not drawn into using inappropriate therapies because they were “free,” nor did we pass up desirable therapies because they were “not covered.”
The second advantage of being insurance-free is we avoid bureaucracy. We don’t fill out insurance forms; we don’t make phone calls trying to find out what’s covered; and we don’t play games (with the collusion of doctors) trying to get things we need paid for by someone else. If an aching back suggests the need for a different mattress, we go out and buy one and don’t waste time and money trying to prove to some clerk that it’s covered. When the government offered a new piñata of benefits in the form of prescription drug coverage, we entirely escaped the frustration of figuring out how to deal with its staggering confusion. While other seniors were closeted with lawyers trying to decide what to sign up for, we went hiking.
Refusing health insurance may have advantages, but what will happen if I face a medical problem that requires more than my savings? To understand my answer, consider a parallel question about some other commodity—say, housing. I announce that I believe in paying for housing from my own financial resources. Someone points out there might be a house I want that costs more than I can afford. That’s just too bad: I don’t get to buy it. I limit my housing consumption according to my resources.
I look at medical care the same way: If something costs too much, I do without. This position, so obvious and sensible in other areas, is considered untenable when it comes to medical care. In this realm the prevailing assumption is that everyone is entitled to all the health services he needs or wants.
It’s one thing to announce this entitlement as an ideal, but quite another to make it work. In the real world medical resources are limited, and therefore all approaches to health care funding employ rationing.
In tax-based systems administrators establish waiting lists so that some patients die before their opportunity for treatment comes up. They ban the use of expensive treatments and alternative therapies. And, without exactly saying so, they underfund medical facilities, so that patients wait in the halls of emergency wards, for example. In commercial insurance plans rationing is implemented by restricting coverage to specific procedures and specific doctors—and by setting upper limits to coverage.
Paying your own medical bills is simply another way of limiting consumption: If a treatment costs too much, you don’t buy it. The advantage of self-rationing is it is frank and open, and thus avoids the whining and blaming that characterize bureaucratic systems.
No Blame Game
Paying your own medical bills also lets you see that there are more socially constructive ways to use funds than spending on health care. Suppose that to fix your limping gait requires complicated care costing hundreds of thousands of dollars. If others pay for this care, you might accept it. But suppose you are paying for it with your own savings. Now you might think twice about spending the money on yourself. You might know of a school for autistic children that could put the money to good use. Or you might have a grandchild who needs the money to start a business.
Such decisions are indeed difficult, but we need to face them if we are to make sensible choices about health care. Today we are not facing them. We are hiding behind the confusion of a tangled government/corporate system that pretends we can have all the medical care we want.
Spending my own money on health care helps me set a rational limit to medical spending, even on spending to preserve my life. Not buying health insurance and not allowing politicians to force others to fund my needs helps me keep my consumption of medical resources within fitting bounds.
This way of looking at health insurance may be old-fashioned, but should it be a crime?
Pingback by Murray Rothbard | The Freeman | Ideas On Liberty on 25 March 2010:
[...] of medical insurance, it was taken for granted that individuals should be forced to buy coverage. James Payne, who refuses, is ready to accept his status as a [...]
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Pingback by ReasonAndJest.com » More on the ObamaCare Disaster on 25 March 2010:
[...] Payne: A Health Insurance Criminal Pleads His Case ….Those without savings are in a different situation: They probably need insurance, or a [...]
Comment by gnieberg on 25 March 2010:
I assume you also have no problem with insurance companies refusing coverage for pre-existing conditions. Because, otherwise, your ideas are a non-starter.
If an insurance companies are required to take all comers, regardless of pre-existing conditions, then we are left with what is called the adverse selection death spiral of insurance costs. (Yes that is its technical name.)
Because of the adverse selection spiral insurance premiums quickly rise, pushing more and more healthy people out of the insurance pool, which further pushes up premiums, which pushes more people out of the pool. Very quickly, the only people left with (very expensive) insurance are sick people, which kinda defeats the purpose of insurance to begin with.
Comment by tina on 28 March 2010:
While your committment to self-reliance is of course admirable, the tenor of your post betrays a cruel lack of insight into the plights of the millions who are NOT in a position to pay for medical care out of their own savings, and who are nevertheless ruthlessly subjected to the ever-rising prices which result from the incomplete but nevertheless massive socialization of the market in medicine. Only the free market, as I am sure you would agree, ensures wide availability of a range of services at natural prices. This possibility has been systematically stolen from the American people through the violence of government intervention. Of course it is ALWAYS the weaker members of any group who suffer when systematic wrongs such as this occur, because they lack the capacity to buffer themselves against rising prices. Just because you have this capacity should not blind you to the rank injustice of larger and larger groups becoming literally INCAPABLE of purchasing NEEDED BASIC healthcare at remotely rational prices. TO say to these millions “pay for it yourself” as a remedy hardly suffices. Its like saying “Sure, violence is being employed to force everyone to purchase dinner at an exclusive restaurant. I can still afford the appetizers there, so I’m okay. If you can’t afford even the appetizers, then too bad for you.” GROSS. Advocates of freedom must actively agitate for the repeal of laws which systematically damage the weakest members of society. It is a moral duty as immediate as the duty of self-reliance.
Comment by SteveJ on 28 March 2010:
From the article:
“Some of us belong in what might be called the “successfully uninsured” category. We are not freeloaders.”
That’s false. Should you suffer a severe stroke requiring extensive surgery and several months in the hospital, it is unlikely that you have the ability to pay for it.
Rather, I will have to foot some of the bill because the hospital spreads the loss throughout the system.
I disagree with Obama and Romney because they require you to buy comprehensive insurance.
I must, however, agree with Milton Friedman, who acknowledged that a minimalist system requiring universal catastrophic coverage is necessary.
Comment by Alexa on 30 March 2010:
This article was very interesting!
I’m guessing you are also much more proactive with your health than the average American because your money is the one at stake if you are not healthy. Aren’t leftists big into improving our health these days? What better way to do that than to make us pay for it, instead of subsidizing us.
Comment by scott on 31 March 2010:
Health care can not be a free market, as catastrophic events make “shopping” impossible. Further, how can the customer/patient know if he is well served?
If you go to a restaurant you know what you get, and you’re always right. But the same isn’t true when you go to a lawyer, accountant or other professional. Even more detached are utilities where you have to have some good/service and ultimately will pay just about any price to get it. Here what the market will bear becomes outsized, the customer is powerless or essentially so. Just as we were when gas ran up to $4/barrel amid an oil glut. But, you gonna go without gas? That takes a long time to adjust to individually and market wide.
Comment by Keely on 1 April 2010:
Payne: With so few of us out there, why would attacking us, matter so much?
I think that we have left the mad, irrational Age of Excess and are being piped to the Age of Ogre. Because, as nutty as this ‘reform’ is, its adherents are crazed to capture more devotees and sacrifice for the Great Maw.
The best advise is: side-step the madness til it does it damage, and is burned out.
K
Comment by Opranger on 1 April 2010:
It seems to me that Obama care insures that everyone gets health care in the short term. In the long run everyone will have expensive but poor health care execept the very rich and, of course, government leadership. The pay for and receive what you can afford approach that Mr. Payne discusses, if made universal; would result in the short term with very expense medical care. Few could afford the best and many could afford nothing but in the long term, costs would drop quality would improve. Eventually we would have inexpensive good quality healthacare for almost everybody.
Comment by Psj on 2 April 2010:
Mr. Payne’s position seems reasonable only if you are unable to see that health care is not solely about the individual. There is a collective aspect to it. Your individual health has an impact on your fellow citizens.
I doubt most of us are willing to allow our fellow citizen to die of ailments that are curable simply because they are unable to afford treatment. Mr. Payne’s approach only works for our society as a whole if we are willing to see 2 year olds die from lack of care. I do not think most of us are willing to do that.
Mr. Payne does not want to pay for insurance. I can understand that, neither do I. But Mr. Payne makes huge assumptions about his ability to go without care when treatment is beyond his means. He uses the example of a limp. But what about strokes or spinal cord injuries? Or any other condition that will quickly deplete his resources but will not outright kill him? Now what if it isn’t his health that is at issue but one of the grandchildren he is willing to limp for? So what about it, Mr. Payne? Is it cool for your grandkids to not receive care because your family lacks the resources?
What if Mr. Payne is shot in the head tomorrow during a mugging and he is no longer capable of making decisions for himself? Is his wife willing to let him go without because they don’t have the money to pay for his care? What if Mrs. Payne is injured in the same mugging? Are his children and grandkids able to make the same cool-headed rational financial assessments?
Now suppose the Paynes are having a family reunion, and good news, everyone showed up. Bad news? There was a gas leak that caused an explosion at the hotel hosting the reunion. Everyone has been incapacitated by injury and it’s up to the rest of us to determine whether or not the Paynes can afford their medical care. So are you willing to let them forgo the care they cannot pay for?
What about schizophrenics or anyone else born with a condition that makes it highly unlikely they will ever amass enough to pay for their own care? What’s the plan for them? Exposure?
What about victims of terrorist attacks? Are you willing to say “It is unfortunate that you did not put aside enough money for this. Sux to be you!”
If you answered yes, you are pretty unusual. The vast majority of us think people should get the care they need regardless of their individual means. There are good reasons for having health insurance.
And that’s just the emotional side of the issue. There are many rational and practical reasons for requiring some form of health insurance. What about communicable diseases? Lost productivity? Maybe a non-limping Mr. Payne is more productive and makes a greater contribution to society. Is it possible that we have an interest in Mr. Payne’s well being? Mr. Payne is not living in a vacuum where his life has no impact on anyone else. His choices affect the rest of us.
We have to balance the individual’s interests with society’s as a whole. We have to figure out a better way to pay for healthcare. Our hodge podgey system isn’t working. So we need a new plan. Requiring people to get health insurance is akin to requiring them to wear seat belts or to purchase car insurance. Does it intrude upon individual liberty? Yes. But we’ve decided that societal interests outweigh the individual’s in those instances. The same is true of healthcare.
For the record, I do not think I am entitled to healthcare simply because I exist. As a matter of principal, I do not believe an individual is entitled to the product of another person’s labor. By the same token, I do not believe that I am entitled to an education. But just as we’ve decided that having an educated population is of benefit, we can also make a similar decision about healthcare. At a certain point practicality should trump ideology. Mr. Payne’s approach to healthcare financing just does not work.
Comment by Scott on 10 April 2010:
Everyone here is ignoring the actual, typical role of insurance. The pooling of risk to limit the effects of catastrophe on any one member of the pool. Health insurance would be a product available to people in a free market but instead of being a third-party payor of all of your healthcare costs, it would cover (or help to cover) unforseen health catastrophes. I can forsee financing options for expensive but neccisary procedures also becoming a commonplace product in the market.
Another thing that I think people ignore is the generousity of people. Giving the responsibility of paying for peoples healthcare to the government, can have the effect of numbing people to the real problems going on around them. Psj’s assertion that absent some sort of government intervention, people would be unable to help other people. I know for a fact that is not true. I work in the music industry and have been a part of MANY fundraising benefit shows for members of the local music scene who could not pay for costly medical care. That is just one example of spontaneous charity. That says nothing of the multitudes of organized charities and charitable organizations that exist in our society.
Education is another place where this has come up. We all believe that education is important, but we end up compromising real education by turning it over to “society” through the deceptively named “public” school system.
In summary, the free market will still be able to provide for catastrophe just like it does for homeowners, automobile owners, and renters. Not only that, direct payment of medical costs will bring about competition and lower prices in our everyday healthcare costs. Imagine how expensive an oil change would be if the government had to pay whatever the distorted price market asked!!
Comment by Michael on 17 April 2010:
The average American has no idea how much of our labor and effort is wasted on health care. First, the government takes your money, a good portion of which is lost to the administrative beaurocracy. Then the money is dispensed as Medicare and Medicaid so individuals can get whatever they want, whenever they want it, for free (trust me, I see this every day as a doctor and the costs of this is just astronomical). This promotes over-utilization and ongoing dependence upon the government of course without any requirements on the individual.
Also, doctors and medical facilities charge nearly twice as much for the care they provide in order to: hire coders, billers, etc. who try to keep the health care provider compliant with state and federal regulations, to hire exta staff to deal with insurance company preauthorizations, and also in order just to pay for their malpractice premiums. Government also forces health care providers and hospitals to take care of government covered patients for less than the cost of their care and to care for the uninsured for free without any expectation on the patient’s part, so that this cost can then be passed onto private insurance and cash pay patients by further inflating costs.
The costs also continue to rise when medical technology continually advances, and our society is made to believe that no one should ever die and that everyone should get every possible procedure no matter how expensive.
Then I ask you “Psj”, is it right that we spend hundreds of thousands of dollars on one highly disabled Medicare stroke patient (sometimes an individual who never put a dime into the system) to barely keep them alive in the ICU and then rehab hospital, etc…just because the government will completely pay for it and so the family feels guilty about discontinuing full medical interventions/life support? Well, before you answer think about this. That money is not only involuntarily taken from the fruits of my labors and your labors (which by the way allow for me to plan for the care of myself, my family, and private charities if not stolen by the government), but that money is also stolen from future generations. From yet unborn children who will be born into slavery to support the ICU stay of a long since dead irresponsible person.
If you truly want freedom, then you must allow people to take some responsibility for their own actions or inactions. If I eat icecream every day, smoke, don’t work, don’t purchase insurance (assuming we have a government who actually allows a fair playing field for the purchase of catastrophic insurance) and then have a serious hear attack tomorrow…well, then let me die. I will not be a thief, stealing from children who have not even been given a chance to live their life and experience liberty!
Comment by Robert Clark on 17 April 2010:
“That’s false. Should you suffer a severe stroke requiring extensive surgery and several months in the hospital, it is unlikely that you have the ability to pay for it.” Illustrates the point nicely. If that happens to me I would not want the treatment described. Thank you.
Comment by James Madison Fan on 19 April 2010:
Psj / Scott,
You have some good points but there has to be a happy medium between the confiscatory policy you advocate and the Machiavellian world Mr. Payne suggests.
Scott compares health care to education. I would note that our educational philanthropy runs from K to 12 not ad infinitum. I’ll yield ethical societal obligations that most Libertarians deny but you have yet to define the limits of said obligation
I asked Scott to define this in our previous discussion and he failed to answer. (Bad form by-the-by). As health care costs continue to climb how much of my paycheck do I have to donate to the federal government so they can treat the indigent? Is there a limit? Do we pay millions to give an alcoholic a liver transplant? Do we pay thousands giving a mother of 6 fertility treatments so she can become Octomom II? At what point do I get to tell the government to stop taking money out of my wallet to treat people, many of which are not citizens? I’m already paying 33% so when does it end? Do we employ Sarah Palin’s “Death Panels” and ask people to explain why their case justifies treatment while someone else’s doesn’t?
However, I am not sympathy to Mr. Payne’s argument about putting money aside for a rainy day as an apt substitute for health insurance under the erroneous belief that $250,000 is a lot of money. At something like $20,000 a day for a hospital stay he would be bankrupt in two weeks. This puts his family in an awkward situation. “I’m sorry Dad but it looks like you’re going to be in here quite some time so we bought a nice pine box for you to lie down in so Mom doesn’t end up living beneath a freeway overpass in a moldy refrigerator box. Hope you don’t mind?” God help him if he has a diabetic kid at $150 per vial of insulin, a premature grandchild, etc. A week in the NICU would leave the entire Payne clan homeless even under the mythical “free market” that supposedly forbids taxes even though Smith himself indicates are a necessary part of the Capitalist machine.
So you have a sympathetic ear gentlemen. I agree with your plea for a societal obligation, but that doesn’t mean I want to carry around millions of people in a hammock made out of my wallet. I already do that with dozens of other “safety net” programs that have somehow devolved into “entitlements.” At some point I’d like to keep some of the money I’m supposedly earning so I can take care of my own medical, dental, housing, and sundry without financing someone else’s indolence.
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Comment by Joe Schmoe on 26 August 2010:
“Mr. Payne’s position seems reasonable only if you are unable to see that health care is not solely about the individual. There is a collective aspect to it. Your individual health has an impact on your fellow citizens.”
Collectivism is seriously pissing me off these days. EVERY choice I make affects someone else, there’s no reason to change that for health care.
“I doubt most of us are willing to allow our fellow citizen to die of ailments that are curable simply because they are unable to afford treatment. Mr. Payne’s approach only works for our society as a whole if we are willing to see 2 year olds die from lack of care. I do not think most of us are willing to do that.”
Private charities worked before the welfare state came into existence. If you’re so generous and kindhearted, perhaps you should go work for free instead of being so generous with other peoples money.
Capitalism at least encourages you to budget your own finances. Socialism encourages you to waste others.
“Mr. Payne does not want to pay for insurance. I can understand that, neither do I. But Mr. Payne makes huge assumptions about his ability to go without care when treatment is beyond his means. He uses the example of a limp. But what about strokes or spinal cord injuries? Or any other condition that will quickly deplete his resources but will not outright kill him? Now what if it isn’t his health that is at issue but one of the grandchildren he is willing to limp for? So what about it, Mr. Payne? Is it cool for your grandkids to not receive care because your family lacks the resources?”
Blame it on the system. Over-regulation and government interference have jacked up the price of care. Mr. Payne indicates that his wife used naturopathic means to treat her cancer; perhaps if we allowed everyone, even insurance-payers, to do so, we would see the allopathic monopoly over healthcare broken.
It is because the FDA mandates extensive safety testing that drug research is in the hands of a few gigantic corporations and costs are through the roof. They have legal jurisdiction over every single thing that “claims to cure, prevent, or treat a disease”. Could a competition of -optional- private safety accredation organizations do the same thing? We do that in the car industry. Should we not leave the fate of low-cost, high risk drugs (or “anything that can cure, prevent, or treat a disease”) in the hands of consumer choice, especially with ever-rising costs?
It is because the States only recognize MDs as legal practitioners that even the simplest of procedures are absurdly expensive. Most of the minor treatments could easily be performed by housewives and APNs (and indeed, they do at my local clinic) but the States all have various clauses requiring either the supervision or direct involvement of MDs. These people go through up to 15 years of post-secondary and enter the industry in the pockets of Big Pharma and with mountains of debt on their hands. Do we really need a doctor to fill out a prescription for painkillers? Obviously not, as mine just pokes his head into the room, signs some paper, and walks out.
It is because the Medicare and Medicaid programs mandate the use of a single system run by a single private organization (the AMAs CPT program) to determine the possible treatments that are available to people that us users have such resitricted choice and that procedures cost such an absurd amount. Perhaps if we were free to persue any means of healthcare we desired these expensive allopathic treatments might die out or be forced to become more efficient.
And it will be because of mandated health insurance that our one chance at actual healthcare is destroyed, as each and every member of society persues treatment that is out of almost everyone’s means and engages in reckless behaviour that damages their long-term health. When people can’t be held personally responsible for their health we allow greed (yes, I said it, this system is based off of greed) to make choices that hurt other people (like demand the best). At least competition and free market channels personal greed into something constructive.
Any time you force monopolies you open up the door for pure corruption to infect the system and introduce inefficiencies and non-competitiveness. It may be painful to trust the trial-and-error of the free market when it comes to human lives, but when it comes to the risk of mistreatment and the associated cost (or lack of), only the free market can balance the efficiencies.
“What about schizophrenics or anyone else born with a condition that makes it highly unlikely they will ever amass enough to pay for their own care? What’s the plan for them? Exposure? What about victims of terrorist attacks? Are you willing to say ‘It is unfortunate that you did not put aside enough money for this. Sux to be you!’
If you answered yes, you are pretty unusual. The vast majority of us think people should get the care they need regardless of their individual means. There are good reasons for having health insurance.”
Feel free to donate if you want.
“And that’s just the emotional side of the issue. There are many rational and practical reasons for requiring some form of health insurance. What about communicable diseases? Lost productivity? Maybe a non-limping Mr. Payne is more productive and makes a greater contribution to society. Is it possible that we have an interest in Mr. Payne’s well being? Mr. Payne is not living in a vacuum where his life has no impact on anyone else. His choices affect the rest of us.”
And yet they are still his choices to make. If I choose to buy ice cream rather than potato chips, that affects people. The point of giving 100% choice and anonymity to everyone is to find out what society wants. Actually, that’s a collectivist term: the point of the free market is to find out what each and every individual in this abstract, meaningless concept called ‘our society’ wants. Things that people don’t want or think are too expensive or don’t think are reliable (or whatever) won’t make profits, and thus won’t survive as a business, while those that provide healthcare the way everyone wants in the best and most cost-efficient/effective way possible will.
Socialism seeks to take the win-win of capitalism and turn it into a lose-lose: you get terrible healthcare and I foot the bill.
“For the record, I do not think I am entitled to healthcare simply because I exist. As a matter of principal, I do not believe an individual is entitled to the product of another person’s labor. By the same token, I do not believe that I am entitled to an education. But just as we’ve decided that having an educated population is of benefit, we can also make a similar decision about healthcare. At a certain point practicality should trump ideology. Mr. Payne’s approach to healthcare financing just does not work.”
Hah, you brought in education, perfect example of why it doesn’t work!
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Comment by GregB on 24 September 2010:
Excellent post, James Madison Fan. And humorous too!
Indeed, what make Mr. Payne argument non-viable is that the entire medical system is strangled by government regulation that translates into unreasonable pricing, higher than true market demand.
True demand would bring critical care stays to less than $20K per day and vials of insulin to costs that real people on real salaries can really afford.
Unfortunately, I see neither the day nor the peaceful means to extricate government intervention from our medical system or any other aspect of our lives.
Comment by Drik on 24 September 2010:
Mr. Payne, you are a dangerous person and should obviously be in jail lest this anti-community idea spread and infect other Americans with the silly notion that they are responsible for themselves.