A story on NPR this morning dicussed provision in the Health Care legislation that would require individuals to buy health insurance. They said that not requiring insurance would bring up the 'free rider' problem in which, according to the news story, some people would not buy insurance knowing that, if they got in an accident or had a serious illness, they would be taken care of in any case and the cost of their care would be paid by those who had bought insurance through higher premiums.
Stupid question: When did it become the default assumption that the expenses of people who don't buy health insurance should be borne by those who do?
Let's take that assumption out of the scenario above. Now, if I get in a major accident I get taken to a hospital who saves my life. They then present the bill to me for services rendered. If I have insurance, it kicks in at this point. If I don't have insurance, then I must pay those bills myself. If I run out of money (not just what's in my bank account, but maxing out my credit cards, emptying my 401(k), and mortaging my house to the hilt) to pay those bills, I can apply for state aid at that point.
This may seem a cold and cruel scenario, but guess what: The risk of that kind of loss would incentivize me to buy insurance voluntarily. And wasn't that really the best idea in the first place. See? No government mandate required.
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