Sunday, October 4, 2009

The Socialized Medicine Scheme: the Compulsory Auto Insurance Argument

If you look at the 09/21/2009 post on The Last Embassy you will see a discussion entitled The Socialized Medicine Scheme: now its like Auto Insurance?

The post discusses the fallacy in the argument that compulsory health insurance and state mandated compulsory auto insurance are one in the same. The argument was put forth in some circles, then consequently used as a “talking point” by Mr. Obama in regards to the “obligation” to purchase health insurance being the same as the “obligation” to buy auto insurance. The fallacy of the argument is the failure to understand the obligation aspect of the insurance.

However, the argument has taken on a new dimension.

When health-care reform (aka health insurance reform) is debated you'll notice a new argument that the public will be forced/obligated to buy health insurance which is unconstitutional and the proposed penalty for non-purchase is unfair. Under the proposed health-care legislation, failure to buy health insurance results in a significant fine and potential jail time. Forced purchase of any item, including health insurance, is unconstitutional. That the significant fine and potential jail time is a sever penalty on the middle class, and an even worse penalty on the poor.

The rebuttal to the argument is: then you think compulsory auto insurance should not be the law and the public should have no protection?!?

The rebuttal is extremely flawed. Its a complete disconnect. Why is the rebuttal flawed? The flaw is the misconception of the term “obligation”.

Many people think insurance is insurance. That is, that the many types of insurance are basically generic. Hence the compulsory auto insurance state law requirement is exactly like, akin to, and the same as compulsory health insurance.

Compulsory auto insurance laws are required due to the bodily injury and property damage liability arising from the operation of vehicles. That is, the required auto insurance coverage mandated by state law is for the benefit of an exogenous party. Your "obligation" is that of liability to another party.

Health insurance is the exact opposite of compulsory auto insurance in regards to who benefits and what obligation exists. That is, health insurance is purchased for the direct benefit of the policy owner. Health insurance is not purchased for the benefit of an exogenous party. The "obligation" is to yourself. Your failure to purchase health insurance does not create a bodily injury or property damage liability to an exogenous party.

Hence compulsory health insurance being used as a direct comparison to compulsory auto insurance ignores the obligation aspect and the party that benefits from the insurance.

Going back to the rebuttal mentioned above, the failure to buy health insurance has nothing to do with the public protection aspect of the rebuttal argument. There is a clear and major difference between the obligation to the “public” being protected against negligence and the obligation of the “public” being required to buy health insurance for their own benefit.

Health insurance has absolutely nothing to do with public protection against negligence. That is, within compulsory auto insurance the public protection element is negligence and the public’s recourse is the insurance. In health-care/health insurance reform and consequently the argument for compulsory health insurance, where is the public protection element? The public suffers no negligence and hence does not need insurance as a recourse for negligent acts.

Hence the rebuttal mentioned above, then you think compulsory auto insurance should not be the law and the public should have no protection, holds no water as the "public protection" aspect is confused in regards to the separate and distinct points of obligation to the public and the obligation of the public.

Therefore, compulsory auto insurance and compulsory health insurance are two separate and distinct concepts that are most comparable in their many differences and very few similarities.


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