Let’s think a moment about how mandatory insurance can work, in different areas, like health, auto, property.
Generally, you have to have auto insurance to have a driver’s license (how it’s required varies by state) you need property insurance for a mortgage, and with Obamacare (and previously Romneycare in Massachusetts) health insurance. And Medicare and single payer in most other countries can be viewed as mandatory health insurance, paid for by much higher taxes.
Obamacare (the Affordable Care Act) is partly driven by requirement that “healthy” young people will buy coverages they as individuals are almost certainly not going to need, to support otherwise much higher premiums for people who do need them. I’ve said here that we probably need publicly funded props (subsidies — not just tax cuts — and reinsurance, to help pay for health care for the sickest people), which would affect the deficit and maybe require cuts elsewhere (maybe in Social Security, for example, slowly increasing age eligibility) to control spending. I may be OK with some of the aspects of “community rating” – that is, men have to buy pregnancy coverage because it takes two to tango – and we want, as a policy matter, some sort of gender equality. (It wouldn’t hurt me some day if PrEP were covered, although at my age it’s not real likely.)
But requiring people to buy add-on coverages for other people’s risks (“moral hazard”) is generally a dangerous idea, that can set up a bad precedent for other misuse. That’s one reason why I am somewhat behind “TrumpCare” or “RyanCare” or “PriceCare,” if you really get serious about covering everybody somehow. The Republicans want the states to take more responsibility for this area. Under a federal system (compared to a unitary system like China’s) that seems appropriate. We no longer trust the states to manage their own ideas of “equal protection” (from the 14th Amendment all the way to the Civil Rights Movement of the 1960s, ending with Stonewall) but we generally allow states a lot of leeway in just how they want their residents to pay for services or how much to privatize some services. States vary on whether or not they have their own income taxes, and to what extent they want to charge user fees or tolls. As California found out in the late 1970s, they can have their own battles on using property taxes to fund public education. So, yes, the OMB is appropriate concerned about how the reddest states will handle a block grant approach to health care. But our Constitution and federalism limit just how much coercion the federal government can use, even for worthwhile policy goals.
In the past twenty years, auto and property companies have been combining normal property or physical liability (and damage loss, from accidents and storms) with cyber liability from Internet use. The latter liabilities can include the cost of defending frivolous defamation suits (as with review sites) and copyright or even incidental trademark or patent infringement (from trolls), but they can also include losses due to identity theft or cybercrime (recently, ransomware). In some cases, the higher limit auto policies are available only in umbrella policies that have all these other coverages (which have nothing to do with the likelihood of causing an auto accident or of being hit by a tornado). In fact, as we know from the attempts around 2001 or so by the National Writers Union to buy media perils coverage for its members (and another push for this in 2008, shortly before the financial crisis), the risk for an individual consumer of being sued for Internet behavior is extremely hard to underwrite and predict, compared to the risks in the physical world.
I can imagine (especially from the “Left”) pushes to make cyber insurance mandatory components of property policies, and I hope the GOP would apply the same skepticism to this idea it has to health insurance mandatory coverages. You can imagine the pressures: because I have an unusual last name, I’m not as prone to identity theft as someone with an Anglicized name, but should I have to subsidize the premiums of someone more likely to experience it? Because of the “gratuitous” nature of my self-publication (it doesn’t pay its own way) activity “in retirement” (maybe that’s like “in relief” in a baseball game’s bullpen), I don’t face the same risks as other people who actually need to support families with their writing, but I face my own unusual perils (mostly related to “implicit content” as I found out with a bizarre incident in 2005 when I was working as a substitute teacher – the concept has to do with attracting politically or socially motivated targeted risk to others connected to “you”). The main prevention is to know what I am doing. (I do; for example, I know how to recognize scams.)
But the permissive legal environment that has allowed user generated content to flourish does raise serious questions for me, involving some personal matters (how I place value on interactions with others who have more intrinsic need, and how I am willing, with volunteerism, to fit in and belong to a group and speak for its needs – accept “partisanship”). The legal props include Section 230 and DMCA Safe Harbor, all of which makes me wonder how the Web still works in Europe, where these kinds of protections are weaker and where there is even an enforced “right to be forgotten” (and where, as Trump points out, defendants have to prove they told the truth in libel cases). The permissiveness seems to have led to an world where there is a lot of recklessness and abuse, ranging from cuberbullying or stalking or revenge porn, to outright terror recruiting — largely because writers with sincerely put arguments wind up preaching to their own choirs, created by news aggregation. Again, I could be silenced if I had to be insured, because my speech is not “popular” enough to pay its own way, especially in a mandatory insurance world.
(Posted: Wednesday, May 30, 2017 at 6 PM EDT)