Critiquing the Speech: Mandates

I subjected myself to President Obama's health care speech, and some things really struck me about the illogic he tried to foist upon us. I'll zero in on a single issue here: Mandates

President Obama said this about mandates:

If there are affordable options and people still don't sign up for health insurance, it means we pay for those people's expensive emergency room visits.
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There will be a hardship waiver for those individuals who still cannot afford coverage, and 95% of all small businesses, because of their size and narrow profit margin, would be exempt from these requirements. But we cannot have large businesses and individuals who can afford coverage game the system by avoiding responsibility to themselves or their employees. Improving our health care system only works if everybody does their part.

This defies logic.

Those people who can afford coverage are the ones willing and able to pay for their health care out of their own pockets, reasoning that they'll pay less that way than if they buy insurance. Only if they're among the few people who have more paid out in benefits than they pay in as premiums will they come out ahead by buying the insurance. They're gambling that it won't happen to them if they go without any health insurance at all, and the odds are on their side.

Some people, (like Whole Foods employees) purchase low-premium, high-deductible policies that are unlikely to pay a dime for an individual employee in any given year. That way they're covered if they're in the group that actually runs up more bills than premiums over the long term, saving themselves from financial ruin if they're unlucky. But the President's proposal would take that choice away. It will force people to spend money on insurance they have rational reasons not to buy.

This is just the opposite of what insurance is supposed to be for. We buy insurance to cover events that are rare and very bad for our finances, like the untimely death of a parent with children to support. We know that insurance companies make profits, and their employees earn salaries, their suppliers need to be paid, etc. We buy insurance knowing that in the long run we're likely to lose a little money, to protect against the risk that we lose far, far, more.

It is stupid to purchase insurance for things that are relatively likely to happen, but not particularly expensive. For those things, we should budget our money, saving up so we can afford to pay for them. But managing our own finances wisely is too much like personal responsibility, anathema to community organizers who insist on "social responsibility".
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