Monday, September 28, 2009

Insurance Hypocrisy: Property more important than People

It didn't take very long for the conservative Republicans in the SouthEast, who have been yelling a lot lately about how Government is never the answer, to change their tune and beg for government assistance in the wake of widespread flooding. But I resisted posting a story about that, since I hate to hit people when they are down (even ignorant people).

But that was before I found a couple of stories about how the very same people who are opposing government health insurance, are for the exact same thing, but only if it applies to property and not to people's health. So if your property floods, and you didn't bother to purchase flood insurance, then they are all for the government bailing you out. But if you get sick and don't have health insurance, you can die for all they care.

For example, when Hurricane Katrina hit the home of then Senator Trent Lott of Mississippi, and he hadn't purchased flood insurance, he introduced a bill to provide retroactive insurance to flood victims such as himself. Retroactive benefits were also supported by Mississippi's other Senator, Thad Cochran, and by governor Haley Barbour. But all three of these Republican have fought health care reform.

Not only does the government pay for disaster relief, the government also subsidizes flood insurance. So the next time someone screams about not wanting to use taxpayer money to finance health insurance, ask them why taxpayer money is spent on flood insurance. Several states, including Florida, Louisiana, and Texas, are lobbying the government to further subsidize flood insurance programs to the tune of an additional $80 billion. Recall that Texas and Louisiana loudly rejected some of the money from the recent stimulus bill, but that isn't stopping them from asking for an even bigger handout from the federal government.

And while insurance companies will reject you for preexisting conditions, for property the situation is just the opposite — if you live in an area that floods often, such as a hurricane zone, your flood insurance is even cheaper because it is subsidized:

Subsidizing flood insurance for those who live in hurricane zones makes it cheaper for people to live in those zones. This attracts more people to these areas then would naturally choose to live there.

When a hurricane inevitably destroys these areas again, the government will have to pay billions of dollars in insurance claims. Then they will spend more money redeveloping the area. Then they will again offer subsidized flood insurance to the residents of the area, lowering the cost of living, and thereby encouraging more people to move there. Then another hurricane will hit the area…

This has happened so many times before. It will likely happen again and again in the future.

So, why is it acceptable to have a public option for property insurance, but not for health insurance?

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