Saturday, August 6, 2011

Why Don't conservatives Understand Insurance?

Once again conservatives are proving that they don't understand insurance or taxation for that matter. The latest issue is the "mandate" that health insurers must cover birth control. Their objection is either equating birth control to abortion and hence they don't want to pay for on moral grounds. The other objection is that people are being forced to pay for something that they are not going to use. But, yet in both cases they have no trouble paying for births. Insurance works on the concept of shared risk. They get a lot of people to pay in and then they use that money to cover losses. When the cost of losses goes up so does the premium. The cost of a birth far exceeds the cost of birth control. So, in theory the cost of insurance could go down with this mandate, it probably won't but it could. Interestingly enough sterilization is a covered cost as is viagra so why not birth control?

Taxes work the same way. There are a lot of people who object to paying for war for example. Generally conservatives say that paying for war is the cost of living in America but funny how that same argument doesn't apply for liberal expenditures. Like insurance, taxes are about sharing the risk (cost). If want to be the rugged individuals that Conservatives talk about we should move to eliminate the government and other cooperative arrangements (insurance, farm coops, unions,...) and see how that works for people.

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