Obamacare Supporters Act Like Health Insurance Is the Only Way to Hedge Risk

What's a better use of $100 per month: prescription-drug coverage or, say, a much safer car? Is the answer the same for everyone?


Let's make this very simple: Say that I can spend $250 per month on a health insurance plan or $350 to get the exact same plan with prescription-drug coverage.

What's the better deal?

Generally speaking, the right says that's a question for each consumer to decide for himself or herself. And the left says that prescription-drug coverage is just one of the things that all health-insurance plans ought to cover. In their telling, individuals may think they're better off buying cheaper insurance that doesn't cover prescription drugs, but if they get sick they'll realize how wrong they were.

This is unpersuasive to me.

Sure, all else being equal, having prescription-drug coverage* is better than none. But all else is not equal. Even if, for the sake of simplicity, we strip away every good one might purchase with $100, and assume that the proper way to spend that money is on health improvement, it isn't clear that drug coverage is the right purchase.

For some people, it certainly would be**. And I favor a society where everyone who needs prescription drugs can get them. But let's think of a person who, for example, has an hour-long commute each day on a route where a greater-than-average number of traffic accidents occur. Perhaps such a person would be better off spending that $100 a month on a pricier car with exceptional safety features. They may think their current car is adequate; but they might well change their minds if they got in an accident and didn't have any side-impact airbag. Why are things arranged so that they must insure against the possibility of a pricey prescription rather than against the possibility of a serious car accident?

It isn't as if progressive wonks sat down, carefully analyzed the health benefits of spending $1,200 a year on safer travel—or a gym membership, or a treadmill desk in the home office, or paying for sessions with a personal trainer, or joining one of those clubs that sends you vegetables each week—and concluded that a prescription-drug benefit is the best use of $1,200 per year. Rather, health-care wonks looked narrowly at the category of things typically covered by health care, and decided what everyone ought to have, as if that judgment could be reached in isolation.

In concluding that there are health benefits to a mandatory prescription-drug benefit, they seem to have ignored the possibility that many consumers could plausibly use the money it costs to achieve even greater health returns another way. Again, it isn't as if health-care wonks evaluated these alternatives and concluded that prescription-drug coverage is actually superior for virtually everyone.

I wonder if they're fully aware of the judgment they've made, and how they would defend it.



* I have nothing in particular against prescription-drug coverage. Substitute any Obamacare required add-on to more basic insurance if you like.

** New Yorkers who don't drive would have an easy choice in this binary world. So would taxi drivers.