Comment & Debate
Paul Hsieh. “Mandatory Health Insurance: Wrong for Massachusetts, Wrong for America”. The Objective Standard. Fall 2008: “Insurance is a financial service created by businessmen that enables customers to voluntarily share the risks of expensive but rare adverse events, such as serious accidents or illnesses. Customers pay premiums to the insurer; in exchange, they receive payments from the insurer, according to contractually agreed-upon conditions, if a covered adverse event occurs. As with any commodity, insurers voluntarily sell and customers voluntarily purchase this service because each party judges the exchange to be to his benefit.
In order to create a service that would be of value to customers, an insurer must think and plan long-range. He must carefully analyze the likelihoods and costs of these adverse events. He must calculate the proper prices to charge customers in exchange for the promised payments. And he must set these prices at levels that enable him to make a profit while still offering a value to customers. Thus, if the insurer is to provide insurance, he must be left free to think and run his business according to his own judgment.
Similarly, for a customer to determine whether he should purchase insurance, and if so, which policy he should purchase, he must think and act on his own judgment. He must consider the full context of his needs, conditions, behaviors, future plans, and financial situation. If he is to make a sound decision about his insurance needs—which only he can have sufficient knowledge to make—then he too must be left free to think and act as he sees fit.
Mandatory insurance violates the rights of insurers and individuals to act on their own judgment.
A right is a legitimate freedom of action—a freedom of action necessary for the maintenance and furtherance of human life. The right to act on one’s judgment—which means, the right to act on one’s basic means of survival—is one’s basic right. Mandatory insurance violates this right by forcing insurers to sell and customers to purchase insurance on terms and prices dictated not by their own judgment, but by government decree, thus destroying the very conditions that make insurance a value. This is what has caused the disastrous economic consequences in Massachusetts.”