The Magical World of Mandates

Cite this Article
Michael E. Sykuta, The Magical World of Mandates, Truth on the Market (February 10, 2012),

It seems President Obama has discovered a magical cure for his contraception controversy: simply force insurance companies to provide free coverage for contraceptive services, but only for women who work for organizations that qualify for exemption from the original mandate that requires contraceptive coverage be part of any respectable (i.e., Obama-approved) health plan. Never mind the whole religious liberty issue. I think that pales in comparison to the economic liberty argument against the mandates to begin with. But the President’s proposed solution should strike fear into the hearts of any person who likes to be paid for what they do.

The underlying premise of the Administration’s decision is that the federal government has the right to force people to give away the products and services they produce. If the government can force insurance companies to “give away” health care coverage to avoid a political embarrassment, what is to prevent the government from requiring other companies or industries to give away their products if such a mandate would be politically expedient? And more importantly, does Mr Obama really believe any company is going to simply write-off the cost of the “free” service and not cover it by raising the cost of other services? In essence, insurance companies will have incentive simply to raise the price of the health plans they offer to exemption-qualifying employers. Either way, the employer will pay for it. It just might not be listed on the receipt.

Or perhaps Mr. Obama plans to make the cost of the “free” contraceptive care a qualifying charitable contribution for health insurers, since it will only apply to non-profits.

What makes the proposed solution even more ludicrous is that health insurance companies neither manufacture nor deliver, in most cases, contraceptive pills. So why should insurance companies even be involved in this great giveaway? A more direct solution would be to require pharmaceutical manufacturers to give the pills away to begin with. Or to require pharmacies to distribute them for free to qualifying individuals.

Regardless of where one stands on women’s reproductive rights, women’s health or religious liberty, we all make our living by getting paid for what we do. The President’s mandate attempts to create something from nothing by forcing insurers to provide services without getting paid for them. That should violate the sensibilities of anyone who works for their pay.