Friday, November 22, 2013

The Obscene Horror of Subsidized Maternity Care

One of the objections to the Affordable Care Act is that it forces people who currently don't intend to have any, or at least any more,  children to pay higher premiums than they would if they could select a policy that excludes maternity coverage.

The most obtuse version is the men that complain about being charged for maternity coverage. Dude, the insurance company knows that offering you maternity coverage costs them nothing, and you will be charged accordingly.

Greg Mankiw, who is a pretty smart guy, and usually smarter than this, presents a somewhat less stupid version:
In the law, having children has been deemed a pre-existing condition, although it is not quite described as such. Everyone is now expected to buy insurance to pay for pregnancy and maternity care, even those who never intend to have children. The goal is to spread the risk of childbirth among the larger community. 
But having children is more a choice than a random act of nature. People who drive a new Porsche pay more for car insurance than those who drive an old Chevy. We consider that fair because which car you drive is a choice. Why isn't having children viewed in the same way? 
I don't know the answer to these questions. But it does seem that fairness in health insurance pricing is being viewed very differently than fairness in pricing other types of insurance. I wonder why.
I don't. Children aren't just consumer goods. Little Porsches don't grow up to be workers and inventors and  entrepreneurs.  Children who become productive adults do. They produce surplus, and most of that doesn't go to the parent.

The person who would rather buy a Chevy doesn't care if nobody buys a Porsche. The person who chooses not to have children is usually making an implicit assumption that someone else will raise the generation that empties their bedpan and keeps the electricity running when they are too old to do it themselves. And I'm fine with that choice, as long as they don't start treating raising a child to productive adulthood as a purely selfish act of personal consumption exactly like buying a more expensive car.

So even the childless by choice have some interest being generous to those that aren't.

But where will it end? Conceivably the tax code might some day give a deduction for dependent children.

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