Ace makes an excellent point about the government’s use of insurance as a foot-in-the-door for socializing our society.
If Man A and Man B are forced, by law, to pool costs, and pay for each other’s costs, they’re socializing each other’s costs of living.
Now insurance isn’t socialism, but it does have that socialism-like feature of risk-pooling and cost-sharing. What makes it “not socialism” is the fact that it applies only to catastrophic, rare, or unpredictable costs — costs which are actually quite small per capita, because while the costs of cancer treatment are very high, fortunately very few people suffer from such a horrible disease.
And what makes it “not socialism” is that insurance contracts are entered into on a voluntarily basis. If the costs of insuring a risk are too high, people don’t buy the product. It’s cheaper to just absorb the cost.
But when you have “risk pools” paying everyone out for costs that are incurred every single day, it becomes very expensive indeed, because while the cost-per-purchase are low, if everyone is drawing out of the pool on a daily basis, that’s a lot of money.
At this point, they’re not “risk pools” of course. It’s just a kind of Commune system. You take from the Pile of Free Money what you need, I’ll take what I need.
If you and I both choose to buy insurance against getting hit by a meteor, voluntarily socializing the risk of such an event between ourselves, that’s not socialism. But if you force me and everybody else to join your risk pool, that is socialism.
It doesn’t matter if we’re insuring against the risk of a meteor strike, or insuring against the need for contraception. That’s socialism.
Look, for instance, at the federal crop insurance program. It’s a government program socializing risk among farmers. It’s voluntary now, though heavily subsidized, and for two years (from 1994 until it was repealed in 1996) it was mandatory if you wanted to receive other benefits.
Insurance is going to be used as the method through which which the government is going to socialize our society. Insurance, when optional, is fine. Insurance where we don’t get a choice is socialism.