Forcing insurance companies to cover preexisting conditions is immoral
President Obama could lead a more honest debate by proposing a welfare program for those who can't get coverage – and paying for it with new taxes.
President Obama says he wants an honest debate over healthcare. I would take his plea more seriously if he gave the following speech:
"My fellow Americans, today I propose a program to help those among us who, because of an existing serious illness, do not qualify for health insurance. I do not blame insurance companies for being unwilling to write policies for existing illnesses. Forcing the companies to cover already sick people would be wrong because it would not be true insurance. Insurance is about future risk and uncertainty, not about past or present actualities. Insuring against an existing illness would be like insuring against a house fire when the house is already aflame. That makes no sense. Insurance companies are businesses in which shareholders, among whom are people living or counting on retirement accounts, have invested to make money. There is nothing wrong with that. But the companies can't make money if they are forced to cover people who have never paid premiums.
"Nevertheless, such people are ill and cannot afford coverage. They deserve our compassion and our help. So I propose a new welfare program. Yes, I said 'welfare,' for reasons that will be clear. I will recommend to Congress that everyone's taxes be raised to create a fund from which we will pay the medical bills of those whose existing illnesses prevent them from buying health insurance.
"Why do I say that everyone's taxes should be raised? Because if we as a society decide to help these unfortunate people, the burden should be spread throughout society. As tempting as it would be, it would be wrong to impose that burden on only a few segments of the population, such as the rich or the insurance companies' shareholders. Everyone should make some sacrifice in this good cause."
I would have more respect for Mr. Obama if he gave such a speech, but that doesn't mean I would agree with him. Such a program would be what 19th century French economist Frédéric Bastiat called "legal plunder" – forcibly transferring taxpayers' money to others. It would also create an incentive to hold off buying insurance until one got sick. The program fails on both moral and practical terms.