We all await a momentous Supreme Court decision on the future of health insurance coverage in the U.S. Countless words have been spoken and put to print, but here’s something you may not have heard.
The cost of life insurance and annuities is increasing – the former due to 30 years of declining interest rates and the latter due to increasing longevity. We have an epidemic of underinsurance in the U.S. According to LIMRA, 95 million adults have no life insurance and 58 million households are underinsured. This means that the basic needs of surviving dependents for the cost of funerals, living expenses and children’s education will not be met, creating a drain on society. Only 31% of Americans have access to a pension plan1 and the median 401(k) balance is $17,6862, leaving these individuals with nothing but the nominal Social Security benefit. LIMRA estimates 70% of Americans have less than $100,000 saved for retirement and will likely have financial difficulty making their assets last a lengthening lifetime. Frankly, most people are ill-equipped to save and make the financial allocation decisions in their best interests. We must find ways of helping these Americans. We must decrease the cost of insurance for all Americans by including everyone in the insurance market. The deleterious ramifications of impoverished families and seniors clearly affect “interstate commerce,” as they become burdens on entitlement programs and damage local retailers and governments.
Therefore, we should expect Congress under its “Commerce Clause” constitutional prerogative to legislate a requirement that all people purchase government-mandated life and annuity plans, still provided by private insurance companies. Otherwise, they face a stiff penalty/tax owed to the government to help finance the huge new federal bureaucracy necessary to administer it. Expect them to require insurance companies to take all comers, regardless of health, at the same rates. These required plans will be “Cadillac” plans, with a full suite of benefits, overriding state insurance departments’ approval authority and with the special waivers granted at the whim of the President’s Secretary of Health and Human Services and exemptions for Congress, of course.
How crazy is this fantasy? It is what is happening with the new “Right to Health Insurance.” While you may or may not think my analogy apt, or believe that the current health insurance market is so broken (and I agree with you) or Congress must do SOMETHING (again I agree, actually undo a lot of things), you’ll almost never read the key to understanding whether what they have done is constitutional or not. Our Constitution accords Congress enumerated powers. That is, the framers intended for us a representative Congress which would be constrained not to infringe Life, Liberty and the Pursuit of Happiness. To that end, all powers not specifically mentioned in the constitution are deemed to not be theirs, but up to the states. If the Congress’ power to regulate commerce between the states allows them to require you to purchase any private product or service, then there is no limit to their powers; you can be compelled to spend your resources on anything and everything Congress dictates. This is the type of oppression the colonists were experiencing from the King of England, which resulted in the Declaration of Independence. Health insurance is therefore no longer insurance, where a company and a willing party transact to cover the party against unknown and unforeseeable losses, for you have been compelled to buy from a decreasing number of private carriers and price mechanisms have been distorted.
Of course, Congress could have simply nationalized health insurance (Single Payer) with a government program à la Medicare and Social Security and funded it with a taxing mechanism. That’s not insurance by any other than contrived definitions – it is a social program, not willing parties contracting. That would be constitutional, but was deemed politically unfeasible, so this unconstitutional hybrid method was used to sneak the camel’s nose under the tent to start the inexorable process toward a Single Payer plan. If the Court decides the PPACA to be constitutional, of course we will survive and you and I will soldier on, making the best of the new 2,700-page regulation, but it will be a blow to the rights of a free and independent people. We will cast our eyes over our shoulders looking for the next set of diktats which commandeer our resources for what Congress thinks is our own good.
What is insurance? It’s what all Americans shop for along with key life needs, houses, clothing, food and transportation. It’s what Creative is proud to represent the benefits of and support you in your marketing. It’s what you, the ground-troop agents and agencies make a career of selling every day under state supervision, distributing risk-lowering products which have reduced anxiety, given peace of mind and improved the lives of millions. God bless you and your profession.
Mike
1 Bureau of Labor Statistics, 2010.
2 Employee Benefit Research Institute. 401(k) Plan Asset Allocation, Account Balances, and Loan Activity in 2010. December 2011.
FOR AGENT USE ONLY. NOT FOR USE WITH THE GENERAL PUBLIC. 12263 – 2012/4/9