Here’s a letter that I sent earlier this afternoon to a reporter for CBS News:
Fools On the Hill
Mr. Bob Foss, CBS Radio News
New York, NY
Dear Mr. Foss:
On today’s 1:00pm national-news radio broadcast you reported that the Senate voted to require all insurance companies “to cover mammograms and pap smears at no cost.”
The Senate can vote as much as it wants to do such a thing, but it might just as well vote to stop the earth from rotating or flies from buzzing. To be performed, mammograms and pap smears require resources, both human and non-human. These resources have alternative uses. So whenever these resources are used to produce a mammogram or a pap smear, other things that these resources could have been – but aren’t – used to produce are not produced. The value of the goods and services that are not produced is the mammogram’s or pap-smear’s cost.
And because these procedures are inevitably costly, there is an inevitable cost to insurers of covering them.
In theory, government might force A to pay for B’s mammograms and pap smears. But it absolutely cannot eliminate these costs.
In practice – and especially if “health-care reform” makes the health-insurance industry more competitive – insurers’ cost of covering these procedures will inevitably be reflected in the premiums they charge. Firms in competitive industries are driven out of business if they don’t cover all of their costs.
You and your colleagues in the mainstream media should stop speaking as if costs can be magically legislated away by the Fools on the Hill. Such a change in the way you report the news would be a first step toward a more realistic assessment of the limits that constrain government’s power to create heaven on earth.
Donald J. Boudreaux
Donald J. Boudreaux is Chairman of the Department of Economics at George Mason University in Fairfax, Virginia.