Today I received the first of what I expect will be a million billion (more) e-mails focused on the tyranny of forcing people to buy health insurance. It came from Joe of Towanda, Pa. (he doesn't want his name used here—"I know where you're coming from," he says). I have no idea why he sent it to me:

I actually agree with Joe. It

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is

pretty crazy for the government to require everyone to buy a commercial product that is sold on a for-profit basis.

What I don't understand, though, is where were Joe and his legions 30 to 40 years ago, when most states mandated that every car owner buy automobile liability insurance? (Massachusetts was first to mandate car insurance, in 1927; New Hampshire is the last to not mandate it).

I wrote Joe back to find out if he has car insurance, as required by Pennsylvania law. He answered immediately that he does, and has for the past 30 years.

So I sent back these two questions:

The minimum required auto-insurance coverage

, but the principle is similar to what's being discussed now in the health-care debate. I'm surprised that the parallel between the proposed health-insurance mandate and the time-tested car insurance mandates has not been much discussed, as the advantages and drawbacks are also similar.

Why it's good:

Mandates mean (almost) everyone you encounter is insured. If everyone has to have coverage, the cost should naturally drop for two reasons: 1) ordinary economies of scale: generally, the more something is produced, the lower the price can be; 2) more people in the risk pool statistically means lower premiums. Left to their own devices, most people wouldn't buy insurance. Self-aware bad drivers are probably the rarest kind (most people think they're above average), and in a completely "free choice" system, the best drivers would likely find themselves victimized by bad drivers who did not have insurance. Costs for the "good" people would increase, as they would be paying both insurance premiums and any costs associated with car repairs and medical bills incurred when irresponsible, uninsured motorists collided with them. Of course, the costs of those uninsured peoples' injuries would also be borne substantially by taxpayers, as injured people receive free charity care that is passed on to others via higher bills and through Medicaid taxes. Mandates work to minimize this unfair cost-shifting from irresponsible to responsible people.

Why it's bad:

There are three main problems with our current system of state-based car insurance mandates:

1) State variations in minimum-coverage limits. These can create dispute when, for example, a person from Massachusetts (a low-minimum state) gets into an accident with someone from Maine (high minimums) or New Hampshire (The Granite-head State; no insurance required). The state-based system is inefficient and confusing at the margins.

2) Regulation. State insurance regulators vary widely in their vigor. Some, like Florida, are reasonably consumer-oriented and well-staffed enough to do the job. Others (Connecticut, say) have the expertise to be good regulators but are controlled by the industry, which is very important to the state's economy. Still others (Alabama, Tennessee) are simply outmatched by the superior legal firepower marshaled by insurance companies. Aside from allowing unconscionable profits, bait-and-switch tactics that result in denials of coverage, and other minor irritants to policy holders, they also occasionally allow

to masquerade as insurance companies, and seem destined to do so in perpetuity. The other side of regulation is the criminal and civil liabilities attached to driving without insurance. Although I'm sure states vary on this, too, my observation of the problem here in Baltimore, as well as in Hartford, Conn., leads me to conclude that a substantial minority of drivers simply operate outside the law, and when caught there are no significant penalties.

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3) Lawsuit abuse. It's no accident that, when Google-searching state car-insurance mandates, the top hits were web sites maintained by tort lawyers. The

I clicked on included a "Million Dollar Advocates Forum." Lawyers need to make a living, and injured people are, in fact, too often NOT compensated for their injuries. But mandatory-minimum coverage limits on car-insurance policies has created a huge pool of money for lawyers to tap, and it's pretty clear that many of them focus on the liability caps first and the administration of justice for injured victims second, at best. That club I mentioned is "is limited to attorneys who have won million and multi-million dollar verdicts and settlements.

."

So-called "junk lawsuits" are also a staple of the health care debate. But realize: The insurance coverage those lawsuits target are the malpractice policies doctors and hospitals carry, not the health-insurance policies consumers need and often lack. This increases medical costs some, and there is a place in the debate for the tort-reform issue. (Though the statistics I've seen indicate that the issue of "junk lawsuits" has been laughably overblown by—what a surprise!—the insurance lobby and the business lobby, both of which have long claimed that every consumer or employee tort action against a corporation is "without merit." We know this because any time a company is sued, any press release or statement issued by a company spokesman includes those words. Check it for yourself.)

The main troubles, then, with state car-insurance mandates is that they are too varied, hard to enforce, and subject to sometimes weak state regulation. A system of mandated private health insurance based on this model would have similar drawbacks, and one other that is seldom mentioned in the debate.

As with car insurance, health insurance depends on large pools of premium payers buoying a much smaller group of people making claims. Our current, privatized, state-regulated health-insurance system divides that risk pool into ever smaller slices, and then employs large numbers of trained medical professionals to monitor and control who gets in the risk pool.

That's why you have to apply for health and long-term care insurance, and why you can be denied—or your premium jacked up to the stratosphere—if it is discovered that you are sick, or may soon be.

Weeding out people with "pre-existing conditions" takes brain power. The people employed by insurance companies to do this work are most often nurses (sometimes doctors), and they are usually paid

more

than they would earn if they were doing the job they were trained to do—taking care of actual sick people.

So in trying to protect their risk pool (and their profits), private insurers actually decrease the supply of caretakers (making those remaining more valuable, and able to earn higher pay). They have to do this, of course, because any company that doesn't will soon be swamped by only the sick, while all the well people flee to companies offering lower-cost plans.

The answer to the problem is straightforward: Abolish private health insurance companies and create a government-administered system in which everyone is given the same coverage in exchange for payments derived through income (or other) taxes. This would put many doctors and nurses back to work providing care and solve the problem of uninsured people. Unlike with a private mandate, payment would be ensured through the same mechanisms that compel folks to pay taxes. Limit tort liability and put the private insurance administrators to work rooting out potential fraud and waste. The savings in administrative costs alone would pay for the uninsured, whose costs have long been shifted and discounted anyway. Logically, the debate should not be about the abandoned "public option" or a proposed "private insurance mandate." The plan should be a public mandate.

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Obviously, I'm a complete waterhead to even suggest this.

For reasons that seem to be embedded in their skulls like alien microchips, many U.S. citizens seem to share an unexamined faith in for-profit corporations' desire to to do the right thing, paired with an equally unquestioned suspicion of their democratically elected government—especially government regulations designed to protect citizens' interests.

Joe shut me up good. Here's his answer to my two questions:

Well, Joe, I can't argue with that logic.

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