Let’s Be Honest and Call It Welfare, Not Insurance Reform

Should government forbid insurance companies from putting conditions on the policies they write – for example, forbidding “pre-existing conditions” limitations?

Sheldon Richman says it would be more intellectually honest to create a new welfare program, paid for with a tax on everyone. Here’s what he says President Obama should have told Congress last week:

My fellow Americans, today I propose a program to help those among us who, because of an existing serious illness, do not qualify for health insurance. I do not blame insurance companies for being unwilling to write policies for existing illnesses. Forcing the companies to cover already sick people would be wrong because it would not be true insurance. Insurance is about future risk and uncertainty, not about past or present actualities. Insuring against an existing illness would be like insuring against a house fire when the house is already aflame. That makes no sense. Insurance companies are businesses in which shareholders, among whom are people living or counting on retirement accounts, have invested to make money. There is nothing wrong with that. But the companies can’t make money if they are forced to cover people who have never paid premiums.

“Nevertheless, such people are ill and cannot afford coverage. They deserve our compassion and our help. So I propose a new welfare program. Yes, I said ‘welfare,’ for reasons that will be clear. I will recommend to Congress that everyone’s taxes be raised to create a fund from which we will pay the medical bills of those whose existing illnesses prevent them from buying health insurance.

Read the rest of it here.

Cross-posted from State House Call.