Is California’s low-cost insurance program appropriate in a capitalist country?

Cutting to the chase, America likes to think of itself as a country on its own, better than every other country because it’s driven by capitalism. Anything that suggests socialism is pulling America in the wrong direction, following in the footsteps of Europe or the communist countries — and that would never do. So America is the land of the free where people either make enough money to eat, or they are left to depend on charity. If people grow to expect charities or the state will help them out when they get into trouble, they have no incentive to pull themselves out of their difficulty by their own bootstraps. They become dependent, a drag on society. That’s why America fights against the notion of socialized medicine. Other countries may use tax revenues to pay doctors and run hospitals. America believes in the power of the dollar to buy the needed health care services — either out of savings or because of insurance. The weak are left to die. . .

Well, leaving people to die would be a little extreme for a Christian country, so America has a welfare program that pays out cash to the needy, gives food stamps to those who cannot afford to eat, and empowers hospital ERs to treat those without money. Except despite the money made available by federal government, America now has record levels of its citizens living in poverty. That suggests federal welfare programs are failing. Or perhaps the federal government has done as much as it should. How much money should taxpayers give to the poor and needy?

Taking a specific example at state level, for the second year in a row, California Department of Insurance is reducing the rates for the Low Cost Auto Insurance Program.

Why should the state government be making it easier for the poor to qualify for the program? The answer is simple. California still has too many uninsured drivers on the road. Drivers qualify if they are at least nineteen years old, they have a good driving record over three or more years, and own a vehicle worth less than $20,000.
These figures show an estimate of the number of uninsured drivers on the roads in California up to 2004 by comparing the number of vehicles registered against the number of vehicles reported as insured by the auto insurance companies. The low-cost program was developed in 1999 with the intention of further reducing the number of people driving without insurance.


These figures show the best result has been a stabilization of the number of uninsured. It has not produced the same dramatic fall seen from 1995 to 1998. This makes the insurance question a difficult political issue. The more uninsured drivers there are, the more the law-abiding must pay. So just how much should the state government spend to support the poor when spending an equal amount of law enforcement might be more effective. If drivers thought they would see their vehicles confiscated if they were not insured, more would find the money to pay the premiums. That’s the capitalist way, isn’t it?

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