No such thing as a free lunch


When arguing against the Genetic Information Nondiscrimination Act last year, I wrote

If discrimination based on comprehensive genetic screening is legal, we can expect health providers to tailor plans according to our individual risk factors. That might be to the disadvantage of a minority of high-risk individuals, but greater information about risk factors will lower uncertainty, and thus lower rates overall. Furthermore, insurers will offer incentives to people who take proactive steps to discover health risks and take steps to alleviate them. Expensive procedures such as frequent biopsies or preemptive removal of organs might be fully covered for individuals whose genetic profiles uncover a high cancer risk.

Unfortunately, Congress did not heed my arguments, and banned genetic discrimination anyway.  It is now illegal for health insurers to take genetic factors into consideration when setting premiums.  What effect do you think the law had on the incentive of insurance companies to pay for their customer’s genetic screening? 

If the goal of the law was to encourage genetic screening, it clearly had the opposite effect.  In response, celebrities are now “fighting for women to have access to MRIs and genetic testing.”  Having coerced insurance companies to ignore the results of genetic testing, people now want to coerce them to pay for it.

Do you think that people who find out that they have a higher probability of having an illness with genetic factors would be more likely to purchase more health insurance than individuals with a low probability of genetic illness?  As I wrote last year,

It does not take an economist to predict that rates would immediately rise, as healthy people, refusing to pay for their neighbor’s health risks, stopped using insurance altogether. As the young and healthy jump ship, insurance companies would have to increase rates, accelerating the trend. Without further government interference, the health insurance business would disappear completely, shortly after millionaires on their deathbeds became the only people able to afford policies.

Are you still wondering why healthcare is so expensive in the U.S.?


The AARP’s "commitment to all generations" campaign is dishonest and hypocritical

Have you seen the AARP’s latest ad campaign?
It shows a series of children who urge us to take action on the “five
core needs” of AARP: “the need for health; the need for financial
security; the need to contribute or give back to society; the need for
community and to stay connected to family, friends and social networks;
and the need to play and enjoy life.” The children imply that the
policies advocated by the AARP will benefit future generations. The
reality is that the policies the AARP advocates are not just wrong, but
are viciously dishonest in harming the very people they claim to

The AARP started out as a program for selling insurance
to retirees. After the government investigated its non-profit status in
the 1990’s, it changed its focus to political advocacy. Rather than
sell insurance to seniors, it now advocates policies which force everyone else to
pay for their member’s expenses. Our government will not allow AARP to
sell products to members and still call itself non-profit, but it has
no problem with AARP’s advocacy of policies which provide “benefits”
directly to AARP’s members. These “benefits” can only come at the
expense of working people and claims on the future income of children –
the very groups the current ad campaign claims to champion.

Contrary to the claims of better ties between older people and the
community, the welfare policies the AARP advocates create division and
bitterness. Working young people hold no delusions about the “benefits”
that programs like Social Security and Medicare promise. Even if these ponzi schemes pay out, they return a pittance compared
to voluntary investments and waste a huge portion of the confiscated
funds on bureaucratic waste and unrelated projects.

The AARP’s lobbyists know that our welfare system will go bankrupt
as baby boomers retire – but they staunchly oppose efforts to reform
it. They want to milk as much as possible from working people for as
long as possible – regardless of the hostility and division it will
create when today’s children and young adults are forced to pay for the
living and healthcare expenses of a growing retired population.

The alienation experienced by many retired people is a real problem
– but its cause is the very policies that organizations like the AARP
advocate. Instead of fostering responsible investing, financial
independence, long-term planning, and mutual support of family members,
the welfare state replaces individual decision making with central
planning, family members with an intrusive nanny state, and individual
responsibility with faith in the omnipotent state to provide for all

The policies the AARP advocates to solve the “needs” of its members
are a claim of ownership over the lives of the very people its
commercials claim to champion. Contrast the socialist policies pushed by the AARP to the capitalist model in the ads of financial
companies: instead of stealing your future from working people, they offer to help you turn the fruit of your own productivity into wealth.