Saturday, December 7, 2013

Are Risk/Reward Choices a Human Right? An American Right? A Civil Right?

Is gun ownership worth the risks? Studies say no.

 A ratio used by many investors to compare the expected returns of an investment to the amount of risk undertaken to capture these returns. This ratio is calculated mathematically by dividing the amount he or she stands to lose if the price moves in the unexpected direction (i.e. the risk) by the amount of profit the trader expects to have made when the position is closed (i.e. the reward).
In this context, I'm applying it not to investing but to choices like not getting health insurance.

The reason I'm taking a look at risk/reward is due to a comment on a blog post speaking about how a small business can now predict with some certainty what their future health-insurance costs are going to be because the ACA (Obamacare) has a regulation that sets insurance premiums by age. In other words, the law established a uniform cost-curve that all insurers must follow. (Not exactly true: It only applies to the federal marketplace. States who are running their own exchanges get to set their own regulations in this regard. But the rule generally applies.)

It turns out that this is a great feature of the ACA and will encourage more small businesses -- and large ones, as well -- to continue to offer health benefits. But what does this have to do with risk/reward? Nothing. But a commenter -- a little incoherently -- decided to take the opportunity to grouse:
Well if it is so unacceptable to be uninsured we surely don't need any mandates? It is not unacceptable since we generally are allowed to accept risk reward in our society.
My best take on that incoherent statement is that the commenter was trying to say that we don't need mandates because being insured is so attractive, and also decided to throw in that "we generally are allowed to accept risk reward in our society."

Now this harkens back to the famous "Let him die? Yeah!" sequence during the Tea-Party-sponsored Republican presidential-primary debate in 2011. The Tea Party crowd in which some loudly proclaimed that a young man without health insurance should just be allowed to die from an accident, apparently because they believe in the right to make your own risk/reward decisions. He decided to have no health insurance, and he is now entitled to die. He's not entitled to free healthcare.


Now, I know this is Ayn Rand Libertarianism 101, but it offers us a chance to look at it from the perspective of the right wing. Do citizens have the right to remain out of an insurance pool when, if they were a part of it, it would benefit an entire society (with much lower health-insurance premiums)?

Like the Tea-Party crowd, libertarians would answer with a loud "Yeah!" And this is at the core of their dislike for regulation of any kind: It's my right to do what I want. If I want to invest in gold, I'll invest in gold. If I want to drink four gallons of Pepsi a day, I'll do it. If I want to blow my head off with a Glock -- or, by accident, my wife's, or my kids', or an intruder's, or some lost old man with Alzheimer's who rang my doorbell -- then it's my right. If I want to be underinsured or uninsured, it's my right.

Americans have managed to hold onto a few of these right-to-your-own-risk/reward choices, but it's not unlimited, and a lot of risk/reward choices have in fact been removed from the public sphere without much controversy (though I wonder if we were making these choices in the current climate, we'd be successful today). Examples are everywhere. We can't own a car without proof of insurance. We can't finance a home without homeowners' insurance. This isn't my area of expertise, but I suspect there are all kinds of regulations regarding private flying and boating involving permits, training, insurance and whatnot.

So, no, there isn't any absolute right to our own risk/reward decision-making on any widespread basis here in the U.S. It's not a universal American right. It's not a civil right.

I would love to not pay a dime for healthcare. But I pay for it because I need it. We all do eventually. Why reject a system that saves us all money and makes healthcare available to more people simply because we have a right to not participate, because we have a right to take a risk and die because of it?

It makes no sense to me, none at all. It doesn't make any sense at all even as a conservative value. That's why I'm so often puzzled by this persistent, etched-in-stone, liberal/conservative divide. We should all be in favor of better, cheaper healthcare. Why aren't we?

This could never happen to me...

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