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Preeti on the Web |
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Providing Food for Thought |
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Subsidize Families Health Insurance |
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According to Lisa Simpson, the smartest eight year old around, children are our most valuable natural resource, more valuable than oil. |
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Childless people freeload off parents |
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March 27, 2005 |
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To Contact Preeti: preetiontheweb at yahoo dot com |
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Please note that all text on this webpage is copyrighted ©. Please do not quote or paraphrase without using proper citations. |
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On Thursday morning, I faced an ethical dilemma. I received an email asking me to participate in a survey of Duke Universitys student health insurance plan. The survey informed me that during the 2003-2004 academic year, single students paid $1,063 for health insurance, but only rang up an average of $757 in medical costs. On the other hand, students with families paid $2,282 for insurance, but rang up an average of $4,773 in medical costs. Essentially, single students subsidize students with families. Given that health insurance premiums (the cost of an insurance plan) are skyrocketing, the survey presented me a table of premiums for single students and families, varying according to levels of subsidization ranging from zero to 59 percent. At zero-percent subsidy, the student premium is $1,310, but for a family the premium is an eyeball-popping $11,320 ($1,310 for the student plus $10,101 for spouse and children). At 59-percent subsidy, the student premium is $1,589, and the family premium is $5,694 ($1,589 for the student plus $4,105 for spouse and children). Here comes my ethical dilemma: the survey asked me to vote for a level of subsidization. As a single adult without children or a spouse, Im inclined towards the zero-percent subsidy. As a woman, graduate student and compassionate individual, however, I ended up selecting the 59-percent subsidy, the highest available. And heres why Duke should go with it. Imagine for a moment that adult workers are a commodity (as dehumanizing as this may sound). Ask yourself, What does it cost to produce an adult worker? First, two people have sex. The mother incurs costs for prenatal care and childbirth. As the child grows up, the parents pay for the childs food, healthcare, clothes, extracurricular activities, schooling (even with public schools, there are additional educational costs, include college) and other costs of raising a child. If both parents work, they pay for daycare (which easily costs $1,000 monthly for an infant). If a parent (overwhelmingly the mother) stays at home to care for the child, she loses hundreds of thousands of dollars in income over the years. The parents assuming all these costs endow their child with the social skills, work ethic and education necessary to function as law-abiding hardworking adults. Meanwhile, society benefits from these children whose labor as adults increase corporations profits, keep the economy thriving and pay for old folks pensions. Despite all the benefits that society reaps from children, parents are never fully reimbursed for the tremendous costs they incurred to produce those children and turn them into productive adults. The solution in the face of such market failure is subsidization. Thats why childless people pay taxes for public schools and why parents receive tax deductions for their children. Bringing this concept back to Duke, single students should subsidize health insurance for families because one day theyre going to benefit from those kids. As adults, those kids will fatten single students 401(k)s, care for them in nursing homes and fund their social security checks. One day as business owners, todays MBA students will be employing todays children to help their businesses thrive. Yet none of them will have fully paid for the cost of transforming those tiny children into adult workers. Additionally, many of todays single students are one day going to have families of their own. Do they really what to set a precedent for having families pay astronomically high insurance costs? Interestingly, the premium hikes will have minimal impact on many, if not most, students. Undergraduates are often covered by their parents plans. Fellowships pay the premiums for many graduate students. Additionally, future MDs, JDs, and MBAs are going to have high salaries, so its relatively painless for them to pay more. From a big picture perspective, this insurance dilemma really points to a broader national problem. Something is wrong with the system when insurance is beyond the financial reach of so many. As a long-term solution, I advocate that the government subsidize insurance for anyone who cant afford it and create incentives for employers to offer it more frequently. My closing message is: The mentality of if you have a baby, thats your choice; you deal with it is flat out wrong. It treats children as an indulgence when theyre really a source of capital that benefits us all. I may never get married, and I may never have children, but I will undoubtedly benefit from todays kids. I have a responsibility to pay for the benefits I receive; anything less is freeloading. |