WHY MANDATES ARE MANDATORY
I pay $500 a year for fire insurance for my home. Let’s say I have a house fire, a kitchen grease fire, or electrical fire or whatever. I call the fire department and they chop through walls and hose down the fire. I then call my insurance agent and they determine there is $50,000 in damage, which they cover. How can they pay $50,000 to repair the damage when I pay only $500 a year? They can do so because there are 100 other home owners (actually many more than 100) who also pay $500 a year but don’t have fires.
Let’s say that fire insurance doesn’t work this way, that people only buy that insurance when they have a fire. I now have a fire that results in $50,000 in damage. I then go to the phone book to get the number of an insurance company, call them and tell them I want $50,000 worth of insurance. The insurance agent says no problem and signs me up for the insurance and tells me they will pay for the damage as soon as I’ve paid my first years premium of $60,000. Obviously, prior condition only insurance is not very effective. In fact, it’s not insurance at all!
Over 70% of the 80 million homeowners in the US have mortgages on their homes. All these mortgages MANDATE that he homeowners carry adequate house insurance. This mandate is not to protect the bank owners and executives: it is to protect the bank’s depositors who put up the money for the mortgages. And this mandate doesn’t just apply to home loans. 107 million Americans have auto loans on their vehicles. These loans also MANDATE that the owners carry full car insurance on those vehicles. Insurance only works when there is a broad base of insured paying affordable amounts each year to cover what could be devastating expenses to the few who incur losses. 49 of the 50 states MANDATE that automobile owners carry full liability insurance on their cars. Why is there no drive to repeal those mandates?
I wonder how many of the super wealthy Republican donors who are pushing for the new tax bill (which includes a repeal of the insurance mandate) and are also senior officers of their companies, are MANDATED to carry life and/or disability insurance to indemnify their companies it they can’t perform their jobs. It would be interesting if each senator and congress person who votes for this tax bill were required to state how many loans they and their family members have that MANDATE insurance coverage for the basis of those loans.
If the tax bill passes as it now stands it will repeal the insurance mandate, which will obliterate the ACA (Affordable Care Act, aka Obamacare). Whatever tax savings this provides for the first few years will be overwhelmed by increases in health insurance and healthcare costs - except for the very wealthy, of course.
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