Several years ago, the first time I tried to buy insurance,
I discovered that I have a pre-existing condition. I was born with this and
have no control over it. My parents and siblings always knew about it, but
hadn't realized it would affect my insurance costs.
For my specific condition, one has to pay 20 to 100
percent more, depending on age and location. That's a steep
price, but my state has adopted an individual mandate, so I have no choice.
I'm getting married soon and, especially fortunate for me,
my fianceé doesn't have this condition.
Despite everything else being the same about us, she pays less for insurance.
I'm not asking for pity though. While my pre-existing
condition is the result of random chance, it's extremely widespread. In fact,
there's almost a 50-50 chance that any person reading this shares my condition.
I have a Y chromosome.
Yes, I am a male, and when I first tried to purchase car
insurance, the lifelong financial impact of this pre-existing condition was
made clear to me. From 16 through death, male drivers pay
substantially more for auto insurance than our female
This "discrimination" is engaged in on the basis of actual
experience: Insurance companies recognize that men drive more, and
drive more dangerously. They experience more crashes and get more
tickets. This means higher repair and medical costs, and so higher insurance
costs for men.
While there are some important differences between auto
insurance and health insurance, there are similarities, too. For example, just
as someone who fails to purchase auto insurance can't call an insurer after a crash and get those
costs covered under a new policy, so a person with no health insurance can't
wait until he or she gets sick to buy a policy and expect to pay no more.
At least in most places they can't. New York and
Massachusetts are two exceptions. As a result, health insurance costs much more in
those places. Many politicians in Congress want to make that the rule
nationwide, which means higher costs everywhere. House Speaker Nancy Pelosi characterized as
"scandalous" one health care proposal that that doesn't "end health insurance
companies' discrimination against people with pre-existing conditions."
The monstrosity that
is the health care bill also limits "discriminatory" health insurance price
differentials based on age - equivalent to prohibiting auto insurers
from charging 16-year-olds much more than 45-year-olds.
However, age-based health insurance price differentials are
no more unjust than auto insurers charging young men more than middle-aged
women; charging those with pre-existing conditions more for health insurance is
no more unjust than auto insurance rates for males being higher than for
Charging everyone the same rates makes insurance a lousy
value for the people in the groups with predictably lower costs, and a steal
for those in the higher cost groups. The former tend to drop their coverage,
leaving a greater proportion of high cost customers in the remaining risk pool,
and so raising the costs even more.
This process creates a vicious cycle, called an "adverse
selection death spiral." Ultimately it will destroy an insurance market, and
government mandates can only do so much to relieve it. Besides diminishing
individual liberty as well.
And so Congress can mandate an end to these "unfair
practices," but that won't change insurance market realities. Making
"discrimination" by insurers illegal won't change economic principles.
Not included in this discussion are the unfortunate victims
of lifelong chronic health problems that make an individual all but uninsurable
at an affordable price. Such people actually represent a relatively small
portion of the population, and a plausible case may be made for "socializing"
the cost of their heath care. The total cost would not be that great compared
to the overall health care market.
Certainly not large enough to justify destroying viable
health insurance markets and turning over to the government nearly one-fifth of
the nation's economy and the health care choices of every American.
Jarrett Skorup is a 2009 graduate of
Grove City College with a dual major in history and political science. He is a
research intern at the Mackinac Center for Public Policy, a research and
educational institute headquartered in Midland, Mich. Permission to reprint in
whole or in part is hereby granted, provided that the author and the Center are