Whenever the topic of health insurance benefit mandates come up, I often use an analogy to illustrate how they are really a form of forced subsidy for special interests groups. For instance, in an article I’ve submitted to The Objective Standard on Massachusetts health care policy, I wrote:
…Mandated benefits such as in vitro fertilization or chiropractor services constitute a similar rights-violation. Individuals must spend their own money on benefits required by the state, regardless of whether they actually want those benefits. These mandates are akin to homeowners in Florida having Congress pass a law requiring Arizona residents to purchase mandatory hurricane insurance. In reality, this merely forces Arizonans to subsidize the hurricane expenses incurred by Floridians–a form of forced wealth redistribution. Similarly, Massachusetts residents are forced to purchase benefits such as in vitro fertilization in order to subsidize patients and providers with political clout.
I intended to pick an extreme hypothetical example to show how ridiculous this idea would be.
I guess I shouldn’t be surprised when last week’s ridiculous hypothetical example turns into today’s real-life serious proposal:
Wall Street Journal
Taxpayers May Face Hurricane Tab
By Elizabeth Williamson, May 31, 2008
…The proposal — backed by giant insurers Allstate Corp. and State Farm Mutual Automobile Insurance Co., as well as Florida lawmakers — focuses on “reinsurance,” the policies bought by insurers themselves to protect against catastrophic losses. The proposal envisions a taxpayer-financed reinsurance program covering all 50 states, which would essentially backstop the giant insurers in case of disaster.
…The program could also shift costs to taxpayers in states with fewer natural-disaster risks.
…Big winners would be coastal states, particularly Florida, where more than half of the nation’s hurricane risk is centered.
The WSJ article also notes that the program is also supported by politicians from both major parties, including Democratic Senators Hillary Clinton of New York, Barack Obama of Illinois, Bill Nelson of Florida, and Florida’s Republican Governor Charlie Crist.