Obama: Mandatory Insurance Isn't A Tax Hike!

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Earlier we argued that any scheme that forced private individuals to buy health insurance (even it was from a private insurer) constituted a “tax” and that economically it was no different than if the government levied an actual tax and then distributed healthcare directly.

The only reason politicians don’t call it a tax is because the word carries bad connotations.

Now Obama is fighting back:

Bloomberg: President Barack Obama said requiring individuals to have health insurance doesn’t amount to a tax increase and that a Senate Finance Committee proposal will move the effort to revamp health-care forward.

“For us to say that you’ve got to take a responsibility to get health insurance is absolutely not a tax increase,” Obama said in an interview on ABC’s “This Week” program. “Right now everybody in America, just about, has to get auto insurance. Nobody considers that a tax increase.”

Obama said one of his goals for health-care legislation is to make insurance affordable if it’s going to be required for everyone. He said that can be done by making plans compete for customers and providing tax credits for premiums.

Emergency care for those now without insurance is imposing a burden on families in the form of higher premiums and higher payments for their own care, he said.

Ah, ok, the car insurance analogy. It’s true, we don’t typically consider mandatory car insurance a tax — the reason we make it mandatory is not to socialize the cost of insurance, but to prevent insured drivers from getting screwed when a non-insured driver careens into them. So, you wanna use public roads and get a licence? Then get yourself some insurance.

Obama pretends that the analogy can be extended here by calling insurance a “responsibility,” with the implication that if you’re uninsured and have to go to the emergency room, the rest of us get screwed because we end up paying it. And this narrow example is similar to the car insurance analogy. But come on, that’s not the real reason he wants everyone insured. He wants all healthy people insured to diversify the risk pool, and make the product (insurance) affordable to the ill or those somehow locked out of it. That is socialisation and that is a tax.

That in itself isn’t a good reason not to do it — we socialize all kinds of risks as a society and have all kinds of safety nets wherever you look — but they do, typically require taxes, even if those taxes are paid not to the government but to private entities.

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