Hunger Insurance?

I read an interesting article awhile ago by Joseph Blast called What Hunger Insurance Could Teach Us About Health Insurance.  In the article, Blast discusses what would happen if your job started offering Hunger Insurance.  It might sound goofy to you but I think it is an easy way to teach an important lesson.

Blast describes the impact on Consumers, Providers, Insurers, the Uninsured and Elected Officials.

Consumers- So, what would you do if your company offered this?  You would start to eat the nicest, most expensive food you could find because it isn’t costing you hardly anything anymore.  Personally, I’d dine on steak and lobster for every meal.  “Some of us would stop checking prices before we ordered food, just as we don’t check prices when we ask for medical treatment.”

Steak and Lobster

Providers- Two things would happen.  First, all grocery stores would start to only stock high priced, high quality foods.  If all stores had the same expensive food how would they attract customers?  They would start to upgrade their facilities even if it wasn’t necessary.  Then they would pass the cost along to the insurers.  Second, “What if you were a lousy grocery store manager who just couldn’t keep costs down and quality up? Before hunger insurance came along, you would be forced out of the market by stores managed by sharper people able to cut costs without sacrificing quality.”  If you are the bad businessman you get to pass along your inefficiencies to the insurer.  The price of food would skyrocket.  Does that remind you of anything else you know of?  (Hint:  Health Care Costs in real life)

Insurers- The initial premiums charged to businesses would be very inaccurate given that they were calculated on historical eating habits.  Business would not respond well to the eventual increase in premiums and look for ways to lower costs.  The insurance companies would start deciding what is (and isn’t) necessary for its consumers.  Is this sounding familiar?

The Uninsured- Would experience the rising prices, but not receive the benefit of insurance.  They would also see the cheaper products disappearing from the shelves because there is not as much demand for them anymore.

Elected Officials- Blast writes “What would happen to our elected officials if hunger insurance existed? Civil rights activists and well-meaning people without much understanding of economics would campaign against for-profit hunger insurers, denouncing them for being heartless in their discrimination against people with eating disorders. They would condemn them for profiting from the provision of something so fundamental to human life as food. ‘Food is a right, not a privilege,’ they would say. ‘The high administrative costs of the hunger insurers are what is causing the problem. We should abolish private hunger insurance companies and replace them with a single provider of food.’”  That seems pretty far fetched, right?  What’s that you say?  You say that is what’s happening with Health Care?

Now, imagine all of the above scenarios, but change the fact the people were still paying something for the insurance in their paycheck to the government providing Universal Hunger Insurance.  Now, other people pay for you to eat.  It would get worse.

Blast goes into more detail on each of these scenarios in his article and offers a solution.  His solution goes hand in hand with the point I wanted to make: Personal Responsibility is an absolute necessity in Health Care and in Free Societies.  In Health Care, we can see the effects lack of personal responsibility has on it everywhere.  The Health Savings Account that Blast recommends is a great idea.  In order to drive cost down people need to take responsibility for their health.  In the current system this does not occur.  It is like renting a car: when you rent a car and buy the insurance you treat the car poorly because you won’t have to pay to maintain, clean or use further down the road.  Health insurance affects people the same way.  Why should I live healthier if my employer will foot the bill for expensive surgeries and treatments?  The HSA solution is a step in the right direction.  Blast suggests that we use it to wean people off of the insurance system.  This would help lower Health Care costs and more importantly drive people to live healthier lives.

Personal responsibility is essential to the survival of Free Societies.  If people do not take an active role in society we will end up in a tyranny.  Look at how easy it is to create a program that may sound good or right to people that has disastrous consequences down the line.  When people shirk personal responsibility by giving the government that same responsibility it diminishes their freedom.