All Commentary
Saturday, January 1, 1994

A Level Playing Field

New York's Health Insurance Law Encourages Laziness, Foolishness, and Failure

Mr. Zimmerman, who was a film producer in New York when he wrote this article, is now a writer and historian, specializing in science and the history of space exploration. No further reproduction of this article is allowed without written permission of the author.

I am far from a wealthy individual. Despite the wonderful stories you hear about filmmakers drinking piña coladas by the swimming pool and having their grapes peeled for them, the movies do not necessarily make you rich. If I had to define my financial class, where I stand in the great rankings of monetary success, I would personally place myself as lower middle class.

In other words, I get by, pay my bills, do the creative work I like, and try to live a decent life.

Being self-employed (a difficult thing to do in our modern corporate word), I have had to pay for my own health insurance. When I realized I needed to do this, I got out the yellow pages, made a few phone calls, and found an insurance company that had a policy I liked and was reasonably priced. Because this is a form of insurance, I did this at the very beginning of my self-employment. I realized that no company would give me a policy if I waited until I was sick. Many people in our society do not do this, and when they do become ill, they cannot get an insurance company to accept them. As tragic as this is, it is the consequence of their own decision to save the cost of insurance when they were healthy.

I did not want to be placed in this situation. The whole idea behind insurance is to obtain it in advance of disaster. I made the calls, I found a policy, and I paid the bills. I recognized that in a truly free society, there are consequences for my actions, and I needed to act to avoid the worst consequence.

The state legislators of New York, also aware of the tragic consequences of not buying health insurance in advance of illness, decided in July 1992 simply to outlaw these consequences. As my own State Assemblyman said, “We needed to level the playing field, so that the millions of middle class people who didn’t have health insurance could get it.”

The subsequent law requires all insurance companies to charge everyone the same rate, regardless of age, health, sex, or occupation. It also forbids all health insurance companies from refusing anyone a policy. In other words, not only are we all created equal, we are all created identical, and the insurance companies are required to make believe that there are no differences between us.

Now, according to supporters of the bill, health insurance will be available for everyone at the same cost. According to the State Insurance Superintendent Salvatore Curiale, “people might have to pay a little more, but it won’t be a significant amount more.”

Within six months of its passage, 10 of the 18 major health insurance companies in New York decided to leave the state. Some decided to refuse to take any additional customers, while others canceled all policies. Of the remaining companies, all have said that they will have to increase their fees, doubling or tripling them.

My own insurance company decided to remain in New York, but it sent me a letter, explaining that because of this new law, my monthly rate would be increased from $120 to $300.

If this is only a little increase, I wonder what our politicians think a big increase would be?

We now have a level playing field: No one can afford health coverage. This monthly bill is certainly beyond my means, and I am sure it is beyond the means of most middle-class people as well.

And since the law forbids insurance companies to refuse anyone, there is no longer an incentive to buy health insurance in advance of an illness. Since a 25-year-old woman in perfect health would pay the same as a 68-year-old man with serious cancer problems, the 25-year-old might as well wait as long as possible before buying the insurance.

Without a pool of healthy customers paying the cost for the sick customers, the whole concept of insurance becomes unprofitable. This is why more than half the insurance companies have left the state, and why eventually, because of this law, private health insurance will sooner or later become unavailable in New York.

Good and Bad Consequences

We supposedly live in a free, capitalistic society, which used to recognize that life is tough, challenging, and requires thought and courage to get through it with success. Some of us are more intelligent, more handsome, or more beautiful, while others are cursed with ugliness, stupidity, or foolishness. Often we make poor decisions that do us more harm than good. And, regardless of any law, there are always good and bad consequences for all our actions.

Yet, we are also afforded the wonderful opportunity to make the most of what we have, regardless of life’s obstacles, to never give up, to make of our lives as much as we can. Even in the most adverse situations, where the world is trying to destroy us, we can still stand tall and proud and try to do right for ourselves and for our loved ones. This approach to life will at least make us noble and great, even amidst failure.

By recognizing and rewarding the individual differences among us, a free society encourages us all to be the best we can be. It encourages us to use our individual talents and abilities at their highest level, because we know that if we choose poorly or without thought we will have to face the bad consequences on our own.

The thinking and philosophy that supports this insurance law in New York denies this premise. By making believe that everyone is identical and requiring the insurance companies to ignore the good and bad differences between us, the law only encourages laziness, foolishness, and failure by everyone. If you have the foresight to buy health insurance before you really need it, you are punished with higher rates. Those who don’t plan ahead and buy it in the last second are rewarded with bargain rates.

Worst of all, because this law attacks the truth that we are all different with different situations, trying to do the best we can, it attacks the foundation of our free society. Without any incentive to be the best we can be, the consequences will surely be the same here as they were in the Soviet Union and in all socialist countries. Health care, once easily available at reasonable prices in New York State, will soon become less accessible and more poorly administered.

This is not a prediction, for I have already observed these very things happening in New York since the law was passed. In trying to eliminate the small, bad consequences of certain individuals’ foolish decisions, the New York State legislature has created a situation where a truly large and terrible consequence will descend upon the heads of all its citizens.