Saturday, October 8, 2011

Ballot Issue 3 and "Free" Health Insurance

By Lewis Sage


Early voting in Ohio has already begun for this November’s elections with three statewide ballot issues to be decided.  Issue 1 proposes a constitutional amendment to raise the age at which a judge may be elected and a YES vote on Issue 2 would approve Senate Bill 5, which either reforms unfair union practices, or unfairly burdens public employees, depending on which side of the argument you prefer.  But what I want to talk about is Issue 3, a proposed amendment to the Ohio State constitution “TO PRESERVE THE FREEDOM OF OHIOANS TO CHOOSE THEIR HEALTH CARE AND HEALTH CARE COVERAGE”.  Let’s not be coy: the real purpose here is to gut the Affordable Care Act (ACA) by removing the universal coverage mandate.


The language for November ballot Issue 3, available on the Secretary of State’s website (http://www.sos.state.oh.us/sos/upload/ballotboard/2011/3-language.pdf) cloaks the real point of Issue 3 with two unnecessary clauses that a) conflate insurance coverage and health care services and b) defend our rights to buy coverage and care:
“The proposed amendment would provide that:
1. In Ohio, no law or rule shall compel, directly or indirectly, any person, employer, or health care provider to participate in a health care system.

2. In Ohio, no law or rule shall prohibit the purchase or sale of health care or health insurance.

3. In Ohio, no law or rule shall impose a penalty or fine for the sale or purchase of health care or health insurance.”
The official arguments supporting and opposing Issue 3 are also available on the Secretary’s website.  Support hinges on the principle of preserving individual freedoms; opposition focuses on the preservation of access to insurance.  Both ignore three salient points. 
First and foremost is the unspoken logic that eliminating mandated coverage would cripple the ACA (known to its detractors as “Obamacare”).  Second, the language of the amendment presents health care – an essentially private good – as somehow logically comparable to health insurance – a good with a substantial public component.  Third, the title presents the amendment as preserving choice among health care providers – a choice which is not under attack by the ACA – and choice among health care insurance options, which choice implicitly includes the opportunity for a free ride.
Let me explain what I mean.
Everyone in America already has health insurance.  Some have privately financed plans, purchased individually or in cooperation with their employers; others’ plans are publicly funded through Medicare or Medicaid, which entail a combination of explicit current taxation and implicit future taxes.  But even if you aren’t old enough, poor enough, or lucky enough to be covered under one of those, you're still insured in America because emergency room care is available, whether you can afford its huge cost or not.  In effect, society has provided everyone with the option of catastrophic coverage… for free.
Because we are not so hard hearted as to deny care to those in immediate need, we shift part of the risk of being “uninsured,” in the conventional sense, from the individual to society at large.  The cost of providing this implicit, high-deductible health insurance is hidden in higher prices – of health care services and of health insurance.
Passage of Issue 3, then, would encourage Ohioans to continue to take a free ride paid for by their more responsible neighbors.  Freedom indeed.





Dr. Lewis C. Sage likes intersections. Since 1991, he has taught Law and Economics, Mathematical Economics, and the Economics of Healthcare. A former Fulbright Fellow (Bulgaria 1995-6), he teaches an interdisciplinary Honors seminar, Enduring Questions, and is studying strategy in the NFL draft with faculty and students in Sports Management and Psychology. E-mail: lsage@bw.edu


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