The Equal Protection Affordable Omnibus Insurance Act
· Farmers: crop failure from adverse weather, pests, fire, etc.
· Doctors: losses from frivolous malpractice suits
· Businessmen: lost sales from general economic downturns that are no fault of their own
· Employees: job losses from economic downturns and business failures
· Homeowners: fire, flood, and storms
· Renters: losses from theft, foreclosures on landlords
· Drivers: collisions with uninsured motorists, deer, etc.
· Married couples going through messy divorce: losing everything to unscrupulous divorce attorneys
· Individuals convicted of felonies such as murder: losses from prison sentences that interfere with holding a steady job
The list goes on. In each case, the resulting losses inflict great harm not only on the immediate victims, but on others.
Enter H.R. 40110, the Equal Protection Affordable Omnibus Insurance Act of 2010. This visionary proposal would provide for general insurance that would protect every American against catastrophic loss and possible bankruptcy. Under the proposal, each citizen would be able to purchase a mandatory insurance policy against losses stemming from any cause. These policies would be sold by private insurers, but would meet government standards for coverage, indemnities, and premiums. Americans unable to afford the insurance would have their premiums subsidized. The insurance would be required to satisfy the following conditions:
1. It would make the insured whole in the event of any loss. For example, if a chronic gambler has a streak of bad luck, his/her losses would be repaid.
2. It would not discriminate on the basis of pre-existing conditions. For example, a homeowner should not be required to pay more simply because his/her house has already burned down.
3. It would meet the criterion of equality. Those who have a share of the national wealth greater than the average would not be allowed to insure that increment of wealth beyond the average. Those with less than the average would be restored to the average level of wealth in event of a loss.
4. It would be budget-neutral. Premiums would be set so as to make the program actuarially sound. Individual premiums would be determined according to one’s share of the national wealth on the basis that the larger one’s share of wealth is, the greater one’s share of overall premium would be.
Point 4 is particularly important. It also guarantees that if a person should have unusually good fortune and his or her income increase, this increase will be reflected in increased premiums and thus shared fairly with all. Hence this insurance also protects the rest of us from unequal distribution of wealth in the event that one of our neighbors is luckier or more successful than we are.
This proposal, if enacted, will end the unfairness of wealth inequality stemming from the differing circumstances with which each person is confronted. After all, if the role of government isn’t to protect us from the vicissitudes of life, what is its role? The Equal Protection Affordable Omnibus Insurance Act – an idea whose time has come.
Editor's note: The author seems to have left it as an exercise for the reader to determine whether this is the latest clever idea to emanate from Washington, or simply some sort of April Fools post. Admittedly, these days the distinction is not always obvious.
originally appeared on the
Hillsdale-econ.com blog, a
new forum for the expression of economic ideas by professors Charles
Steele and Gary Wolfram of Hillsdale College.
Dr. Charles N. Steele is the Herman and Suzanne Dettwiler Chair in Economics and assistant professor at Hillsdale College in Hillsdale, Michigan. His publications include papers on the Soviet economy and economics of transition, economic growth, and institutional change. He received his Ph.D. in economics from New York University in 1997, and has subsequently taught economics at the graduate and undergraduate levels in the People’s Republic of China (China Agricultural University), the Russian Federation (Moscow State University), Ukraine (Economics Education and Research Consortium, National University Kyiv-Mohyla Academy), and the United States (Montana State University). He has also worked as a private consultant in design and review of USDA crop insurance programs with Watts and Associates, Inc.
In addition to economics, Steele's interests include trail running, mountaineering, snowshoeing, and similar outdoor pursuits. He's completed 26 ultramarathons, ten triathlons, and is a nine times finisher of The United States' oldest 50 mile race, the Le Grizz Ultramarathon.
Learn about Mr. Stolyarov's novel, Eden against the Colossus, here.