Poor Being Dropped From Oregon Health Plan

While I was on vacation in Iowa, Conrad (who lives in Hong Kong) unknowingly took up the slack in reporting Oregon news. As if I ever reported much Oregon news...

He found an AP article about large numbers of poor people in Oregon being dropped from the Oregon Health Plan (emphasis added):

Roughly 40,000 poor people have been dropped from the Oregon Health Plan this year because of their failure to make monthly premium payments, some as low as $6 a month.

The departure of more than one-third of the 88,000 poor people from the state-subsidized Oregon Health Plan Standard program has far exceeded the expectations of many state officials.

Advocates for the poor say the premiums are too expensive for some people and the government may have overestimated the ability of people to mail a check.

"It's an enormous barrier," said Ellen Pinney, director of the Oregon Health Action Committee. "Let alone the $6, there is the whole issue of writing a check or getting a money order, putting it in an envelope with a stamp and putting it in the mail to this place in Portland that must receive it by the due date." [source]

<gasp> <choke> <sputter> I cannot think of a witty rejoinder.

Oh, wait, yes I can — does this mean they'll be lowering my taxes?

This isn't a directly related point, so don't draw any conclusions from its proximity to the above, but it's important to understand that the function of insurance is to trade the low risk of a huge cost into the certain risk of a small cost.

Insurance is a tradeoff; having it isn't automatically best. Some people who drive older cars (like myself) rationally choose not to carry collision coverage on their vehicles. A person who owns a concrete house might decide they need very little insurance for it, or they might be willing to carry none and simply bear the risk. A single person with no children might decide to have no life insurance. A very healthy person might rationally choose not to have prescription drug coverage, or might decide to have no health insurance at all.

One of the many problems with socialized health care schemes is that they compel all people to have a certain minimum level of coverage. Of course, this is the opposite perspective from that of "they provide a minimum level of benefits to all people." The problem here is that some people might desire to have less coverage, and to use the money they would have spent on insurance for other, more important things. This is the same pattern I discussed at length when I talked about Social Security.

Socialism in health care, in retirement savings, and other areas overrides the decision of the individual in pursuing their goals. In economic language, it forces them to spend on things with a lower marginal utility. In this way, it's a net loss to the economic system and to the wealth of the individuals within it.