In response to what he dubs “the stupidest argument against health reform”–namely the argument that universal health insurance requires people to pay for someone else’s health care–upyernoz writes:
“paying for someone else” is the whole concept behind insurance. the idea of insurance is that there are certain things (floods, catastrophic medical costs, car crashes) which can be so economically devastating that individuals would be ruined if they had to pay the entire thing out of their own pocket. insurance is a way of pooling risk, everyone pays in, only the unlucky ones draw out. but then everyone can feel more secure knowing they have insurance to fall back on if disaster hits.
in other words, all insurance involves you paying other people’s bills (or other people paying your bills). that’s what insurance is all about. you can call it “socialism” if you want, that’s not an argument, that’s just slapping a label on something. but if you happen to believe it’s evil to pay for other people, then cancel all your insurance policies.
While I’m certain ‘noz and I stand united on the moral imperative of health reform that gives all Americans access to high-quality affordable healthcare, I don’t think his account of the argument he targets is fair, and thus I don’t think he offers a very satisfying response to the person who endorses that argument. Here, as I understand it, is ‘noz’s line of argument:
1. Proponents of the Stupidest Argument Against Health Reform maintain that they should not be forced to pay for another’s medical care.
2. But proponents of the Stupidest Argument willingly buy various forms of insurance without complaining.
3. But buying insurance just is the paying for another’s medicare care.
4. So to be consistent, the proponents should either withdraw their objection to health care reform, or else “cancel all [their] insurance policies.”
I think we can see clearly where ‘noz’s line of argument fails by changing the story a bit:
1. Opponents of income maintenance policies maintain that they should not be forced to pay for another’s wages/income.
2. But opponents of income maintenance policies willingly buy stereos without complaining.
3. But buying stereos just is the paying for another’s wages (namely those who make stereos).
4. So to be consistent, the opponents should either withdraw their objection to income maintenance policies, or else stop buying stereos.
It seems clear that while purchasing a stereo does in fact pay another’s wages, it is false to say that paying another’s wages is the “whole concept” of purchasing a stereo. But then what distinguishes purchasing insurance from buying a stereo? Each seems to amount to the same thing: parting with a sum of money to procure a good or service which is available to one only because certain others are willing to help produce that good or provide that service only because they too get something out of the economic arrangement.
The fact seems to be that those who wish to buy stereos and those who wish to buy insurance may not really care about the economic arrangements and contracts that lie in the background of these purchases. They do not really care that buying a stereo and buying insurance involves paying an amount of money a portion of which ends up paying another’s bills. The one person wants a stereo, and parts with a certain amount of money to get it. The other wants protection from the economic risks associated with (the treatment of) ill health, and pays an insurance premium to get it. It just so happens that, in our world, the reason why these purchases are available to one at all is that other people, who play different roles in the relevant economic domain, also get something out of their involvement. So, again, what could make the purported difference between buying stereos and buying insurance?
If this analogy is as revealing as I think it is, it shows why the proponent of the Stupidest Argument may not be making the silly mistake that ‘noz ascribes to him. To extend the analogy: Assume a tax is levied on all stereo purchases in order fund income maintenance policies for the unemployed. And assume that a would-be stereo-purchaser objects to this. Then that objection cannot be met simply by pointing out that he didn’t have a problem paying another’s wage through his purchase before the tax was levied.
In the case of health insurance, what would be the analog to the stereo tax that the proponent of the Stupidest Argument objects to? Since insurance is typically paid for through premiums, the proponent will likely claim that he should not have to subsidize another’s premium. But this raises the question of whether the initial distribution of income is itself fair, as that is the distribution that determines who has what to put toward premiums. To the extent that it is unjust that some work long hours in dreary jobs for what is now a largely depreciated compensation package, that can provide a reason to ask those who are favored by the structure of the economy to give some back to subsidize the premiums of those who get the short end of the stick.
Another barrier to insurance access has to do with differentials in health status (of which “pre-existing conditions” are one kind). To use a stylized example, assume that you and I form a two-person health insurance market, and that I am fairly healthy and you have a disease that can be treated with only very expensive health interventions. In this situation, each of us is presented with the option to buy insurance. But which insurance we buy, if any, will be influenced by which insurance products are available. If the only insurance product is one that pays for the sort of interventions you need, that product will be very expensive. In that case, I may choose not to buy it, since I feel there are other things I’d rather spend that amount of money on. But that may leave you without the prospect of insurance, since the resulting premium for you will be the same price as the expensive medical care you were hoping to avoid having to pay for directly by purchasing insurance in the first place. You will face a similar problem if there are in fact several insurance products available, and if I choose one that is cheaper. For that one will be cheaper precisely because it doesn’t not cover the expensive treatment you need. So while you may be able to afford that cheaper product, it doesn’t do you much good.
These thought experiments seem to show that the proponent of the Stupidest Argument is also probably objecting to having to subsidize the insurance choices that the market makes expensive for others because they are either more risk averse than he his, or because they in fact require more expensive insurance than the proponent himself wishes to purchase with the funds he has chosen to dedicate to health risk reduction. This is in fact not an objection we should dismiss as stupid, as I think the two-person example shows.
I’m sure ‘noz and I agree that when the simple two-person example is replaced with the much more complex picture presented by the macro situation in the U.S. today–a situation in which income is not distributed fairly and where individuals’ health status is profoundly influenced by myriad social circumstances beyond their control–there is a solid argument in favor of providing all Americans with at least basic health care paid for by general, progressive taxation. But even if we are right, we cannot dismiss the objections of those who disagree with us simply by pointing out that all insurance involves using what was once one person’s money to pay for the health care of another.
The moral of the story is this: it is false to say that the “whole concept” of insurance as such is to pay for another’s care. Yes, it involves that, but the sense in which it does is just the sense in which buying stereos involves paying another’s wage. Not much of moral relevance follows. But, it is absolutely true that the whole concept of certain social insurance schemes is to spread risk and cross-subsidize care for appropriate moral reasons. But those reasons cannot themselves be teased out of the idea of insurance as such.
upyernoz | 11-Oct-09 at 12:02 pm | Permalink
thanks for the response to my post. i think this is the key place where i disagree with your counter-argument:
It seems clear that while purchasing a stereo does in fact pay another’s wages, it is false to say that paying another’s wages is the “whole concept” of purchasing a stereo. But then what distinguishes purchasing insurance from buying a stereo?
the difference you’re overlooking between a stereo and insurance is that the purpose of a stereo is playing music, whereas the purpose of insurance is to have benefits paid out when you need it. so yes, while paying other people’s wages is not the “whole concept” of buying a stereo, getting other people to pay your expenses is pretty central to the purpose of insurance.
that’s what distinguishes buying a stereo from buying insurance. and that’s why i think your analogy in this post is flawed.
Paul | 11-Oct-09 at 12:24 pm | Permalink
assume you buy your stereos online from a manufacturer that builds stereos to order, instead of just shipping you one from his existing inventory. (I don’t think anything hangs on asking you to make this assumption, but it does make the stereo case closer to the insurance case, since you typically get health care well after you buy insurance.) Now it seems that getting other people to build your stereo for you is “pretty central to the purpose of sending in your stereo payment.” Right? But if so, then how is this structurally different from the insurance case, where you make you part with a sum of money (your premium) to secure a service (coverage of medical bills when sick/injured)?
Again, each involves you giving up something (premium, stereo price), others’ giving up something (premium, lost leisure), your getting something (stereo, protection against medical risk), and others’ getting something (protection against medical risk, wages).
So each involves getting other people to do something for you, provided you do something for them. It’s quid pro quo, and it permits people who don’t wish to buy stereos or private insurance to opt out, thereby opting out of a scheme that, yes, involves transferring some of your money into wages or another’s health care. So I don’t see the difference you claim to see between the two industries. And if there is no appreciable, the argumentative leverage you claim to find to rebut the Stupidest Argument vanishes. Well, it vanishes unless there emerges a social intervention in the industry to make it work in ways that wind up distinguishing it from the stereo industry. This is what tax-funded universal insurance does. My subsidiary point is that we should acknowledge that, for doing so allows us to isolate the special moral reasons that lie behind universal health care. Trying to locate those reasons in private insurance purchases is a lost cause, because they don’t exist there.
upyernoz | 11-Oct-09 at 12:31 pm | Permalink
So each involves getting other people to do something for you, provided you do something for them.
yes, but the thing you get from insurance is other people paying your medical bills. getting other people to pay is central to health insurance. and it’s central in a way that paying for the wages of the folks who build your stereo is not central to the point of buying a stereo. in fact, i would bet that while most people sign up for insurance with potential benefit payouts in mind, very very few stereo buyers are thinking about the wages of the people who build the stereos.
that, i think, is a key difference.
Paul | 11-Oct-09 at 12:37 pm | Permalink
the difference you’re overlooking between a stereo and insurance is that the purpose of a stereo is playing music, whereas the purpose of insurance is to have benefits paid out when you need it.
I don’t disagree. But we’re not just talking about the objects of the purchase, but rather the point of purchasing those objects in the first place. And this is why your next claim does not follow from your first. You conclude:
so yes, while paying other people’s wages is not the “whole concept” of buying a stereo, getting other people to pay your expenses is pretty central to the purpose of insurance.
Again, I agree that getting other people to pay your expenses is pretty central to the purpose of insurance. But while getting other people to make your stereo is not central to the purpose of a stereo, it is central the purpose of your paying for a stereo.
Paul | 11-Oct-09 at 12:41 pm | Permalink
the thing you get from insurance is other people paying your medical bills. getting other people to pay is central to health insurance. and it’s central in a way that paying for the wages of the folks who build your stereo is not central to the point of buying a stereo.
You keep repeating this, but how does it comport with the made-to-order stereo example? in that example, paying for the production, by another, of a stereo is exactly the point of your payment. I can see no difference at all between that case and the insurance case.
upyernoz | 11-Oct-09 at 12:56 pm | Permalink
because i don’t want a stereo because someone else made it. i want a stereo because it plays music.
meanwhile, the only reason i want insurance is because i want someone other than me to pay my medical bills if i get sick. getting other people to pay is central to why insurance is desirable whereas who built my stereo, or who is paying for that labor, is not central to why the stereo is desirable.
put another way, say i want a new stereo and find one sitting on the street corner. the abandoned stereo is exactly the kind of stereo i was going to buy and it’s in perfect condition! and it’s free! i don’t have to pay anyone to make it.
ten minutes later, i’m hauling it home i suddenly realize that this is the very same stereo i built myself a year earlier. i can’t believe i forgot about that. how silly of me.
so what do i do? do i turn around and put it back on the corner? of course not, it’s a stereo that does what i need. my desire for a stereo has nothing to do with who built it or how they got paid.
Paul | 11-Oct-09 at 12:57 pm | Permalink
in fact, i would bet that while most people sign up for insurance with potential benefit payouts in mind, very very few stereo buyers are thinking about the wages of the people who build the stereos.
I actually think this helps me more than it helps you. :) Here’s why. Earlier you said:
the thing you get from insurance is other people paying your medical bills.
The fact that you can legitimately insert “other people” in this sentence seems it seems pretty crucial to your argument. You seem to claim that while reference to the motives and/or actions of other people is legitimate in the case of insurance, it is not in the stereo case. I have said that the motives and actions of other people are relevantly in the background of each case in a way that makes the cases parallel each other.
But now you admit that “most people sign up for insurance with potential benefit payouts in mind.” Exactly. They sign up caring about only the fact that if they get sick, a payout will be made. That is, they care only about the risk-protection they are purchasing, usually from an insurance company. They typically don’t think of the millions of other people whose purchase of the same coverage makes their coverage possible. Likewise, the consumer pays for a stereo caring only about the fact that he gets a stereo. So far, we have been able to describe each case without reference to the motives and actions of third parties. We’ve only been talking about the purchaser, and what the purchaser gets (risk protection=payout, stereo).
My point is that once we lift the curtain on these forms of economic activity, the very same background, involving third party actions and inducements emerges in each case.
Paul | 11-Oct-09 at 1:09 pm | Permalink
my desire for a stereo has nothing to do with who built it or how they got paid.
Neither does your desire for access to medical care that won’t bankrupt you.
But in our world, you can buy stereos and access to such medical care only because of an underlying economic arrangement that transfers the price you pay for the good or service to third-party producers. The only difference is that the producers of the stereos are workers who walk away with wages (and businesses that get profit), whereas the producers of risk-protection are consumers who also walk away with risk protection (and the insurance companies that get profit).
upyernoz | 11-Oct-09 at 1:15 pm | Permalink
They sign up caring about only the fact that if they get sick, a payout will be made. That is, they care only about the risk-protection they are purchasing, usually from an insurance company.
but the payout must come from someone else to be valuable. if it comes from the insured person’s pocket, it’s not insurance. it’s true that most people don’t think about who ultimately is paying for the benefit, but central to the whole thing is that whoever it is, it’s not the person making a claim. that’s why someone else paying is central to the idea of insurance, even if they don’t care or think much about who exactly those other people are.
Paul | 11-Oct-09 at 1:26 pm | Permalink
central to the whole thing is that whoever it is, it’s not the person making a claim.
Sorry, but I’m just going to repeat myself: central to the whole thing is that there exists a product whereby an individual can purchase protection against medical risk at a rate that doesn’t bankrupt him or her. It just so happens that the economic arrangement that allows for that involves others who also give up something to get something. That is, they give up a similar premium for the same good. Again, that good is: protection against medical risk at a rate that doesn’t bankrupt the individual.
This is structurally no different than the stereo case.
(I’m enjoying this, even though it’s frustrating. But it worries me that if you and I can’t agree on this, there’s no hope for either of us getting the other side to agree with us on the stuff that really matters.)
Chris | 11-Oct-09 at 2:16 pm | Permalink
Ten comments already? Boy, you guys really missed the blog.
upyernoz | 11-Oct-09 at 2:19 pm | Permalink
yeah, we seem to be going in circles. you see the central thing to insurance as being “protection against medical risk at a rate that doesn’t bankrupt him or her” whereas i see it as “getting someone else to pay for medical expenses if needed.” they’re really just two sides of the same coin.
i mean, the whole reason that medical expenses don’t bankrupt the insured is because someone else pays the expenses. which is why i see the “someone else paying” as the point, whereas you seem to think that the point is just the concept of protection and that looking at the mechanism of that protection opens us up to looking at the mechanisms of all kinds of other transactions, like how i ended up with that stereo.
upyernoz | 11-Oct-09 at 2:19 pm | Permalink
twelve baby!
err, um, 13
Paul | 11-Oct-09 at 2:42 pm | Permalink
I agree that they’re the flip side of the same coin. And I hope it’s clear that I understand that insurance works the way you describe. But yes, given that private insurance would exist in an amoral world of purely self-interested actors, I think it’s revealing to explain how insurance products are quite like so many other products for which the Stupidest Argument would not be so stupid (see the stereo tax example). Again, my point in this exercise is to isolate the moral issue, so that it’s quite clear where moral arguments must be marshaled, and where ridicule of the sort you (usually effectively) provide is appropriate.
Paul | 11-Oct-09 at 2:46 pm | Permalink
the whole reason that medical expenses don’t bankrupt the insured is because someone else pays the expenses.
and the whole reason I have a working stereo is that someone else (who knows what they are doing) made it.
sorry, couldn’t resist. :)
Paul | 11-Oct-09 at 4:56 pm | Permalink
Noz, let’s set aside the issue we’ve been going round and round about. Do the two-person examples at least make intelligible an objection to universal insurance that might go under the heading of “I object to paying for other people’s insurance/medical care”? (Again, while I think such objections can be met, I was trying to show why I don’t think they are among the silliest arguments in this domain.)
upyernoz | 11-Oct-09 at 9:44 pm | Permalink
i guess so. but it could just as easily be an argument explaining why that argument doesn’t hold up. with each of the two people acting in their own self-interest, there effectively is no insurance market for serious health conditions.
“you” in your example has a serious health condition that is expensive to treat. “I” doesn’t want to pay for insurance that covers that kind of condition. in our two person universe, that leaves “you” in an insurance pool of one. that is, he’s paying every dime of his medical treatment, which is equivalent to having no insurance at all.
the “two person insurance market” is not really a market because insurance itself disappears. i guess there could still be catastrophic insurance (because in theory we are all at risk of catastrophe), but i think your example illustrates that a private insurance market that discriminates based on risk isn’t able to do what insurance is supposed to do: distribute risk and make unaffordable things affordable. at least, in terms of non-catastrophic insurance.
rather than illustrating the intelligibility of that kind of objection to health care reform, i think it shows why the two-person argument doesn’t hold up.
Paul | 12-Oct-09 at 11:11 am | Permalink
heh. You are certainly right that in the two-person situation there is effectively no insurance. But I wanted the two-person example to highlight features that would generalize to situations with more people. The lack of an effective insurance market does not generalize in more populated situations, as people with similar risks will find it rational to purchase insurance at prices made reasonable by the fact that enough others are also in the market to reduce their exposure to risk. In contrast, the impact on premiums and payouts of those with higher risks and/or less ability to pay for premiums *will* remain as the population increases.
The two-person example simply highlights elements that would lead to higher premiums and/or less coverage for some as a result of the particular risk-profiles of others who by legislation must be allowed into the same risk pool. It also shows what is a common refrain these days: guaranteed issue and community rating regulations must go hand-in-hand with an individual mandate and a legislated minimum insurance level. For if we want to insist that insurance companies cover those who are of higher risk of expensive medical care, we must force those at low risk into the risk pool, and then at a high enough premium rate, to avoid adverse selection.
In light of this fact, I am willing to acknowledge there is reason to at least pause to ask whether there is an obligation to submit to these nominal curtailments of freedom and appropriation of resources so that others may be benefited. It is here where I find an intelligible, if unsuccessful objection to universal health care that is hidden if we flesh out the Silliest Argument along the lines you suggest.
(Building on my concern that our disagreement makes it hopeless to make headway on disagreements with have with the right, I concede that my constructing arguments on behalf of the right is itself a potential impediment to victory for our morally superior side. But since so few righties read this blog, I think we’re OK.)