Retributions | On Soda Bans and Obamacare

Universalization vs. individual freedom

New York mayor’s Michael Bloomberg’s proposal to regulate the size of soda containers in his city has given rise to much controversy. Some see this as a nanny state intruding into the protected sphere of personal choices while others argue that the proposed ban is at best a starting point and is likely to be ineffective without much more onerous regulations. Writing on the Becker-Posner blog, professor Posner sets the debate nicely,

I am not particularly interested in saving the obese from themselves. I am concerned about the negative externalities of obesity—the costs that the obese impose on others. Some of the others are the purchasers of health insurance and the taxpayers who pay for Medicaid and Medicare and social security disability benefits. Though the obese die on average earlier than the non-obese, which reduces their average health costs somewhat, the reduction is more than offset by the higher health costs that they incur (and by incurring impose, to a considerable extent, on others) because of the effect of obesity on chronic health conditions such as diabetes, heart disease, and joint problems, on mobility generally, and, because of these conditions, on ability to work (and hence on social security disability costs) and on employability (and hence on unemployment insurance costs). Obesity kills, but slowly, and en route to dying the obese run up heavy bills that, to a great extent, others pay. [link]

That is the crux of the argument. The obese impose considerable social costs and the only policy justification for proposals of this nature is to attenuate those costs to the extent possible. Not all costs are quantifiable or recoverable of course—for instance, lost productivity but then we don’t penalize the unemployed. But the negative externalities that the obese impose reflect deliberate social and policy choices. For instance, it is certainly possible to design policies which would ensure that the obese pay a greater share of their medical costs. However, for both political and moral reasons such policies are untenable in the current environment. But it is important to remember that they are still deliberate choice and societies can change directions as it has happened repeatedly in the past.

The more ‘socialized’ healthcare is—with its apogee in a single payer system —the greater the justification for the kind of regulations thats Mayor Bloomberg seeks to impose. After all, if you are asking your fellow citizens to bear the costs of your lifestyle decisions, then they certainly have the right to limit your choices.

In fact, cost recoveries are inherent in both private insurance as well as state regulated universal health care systems. Private  insurance achieves it more directly by using medical underwriting to charge higher premiums to people with greater likelihood of illness and, in turn, costs. With the ongoing advances in genetic testing, what may be permitted in those risk models and what may be deemed too intrusive would be an important conversation in the future. On the other hand, because a universal system cannot impose direct costs on a particular class of people (see community rating), it aims to achieve the same goals with the use of regulative and taxing powers available to the state. What approach one favors then is dictated largely by individual proclivities and inclinations. (Of course, your individual health situation may play a part too.)  In any case, it is virtually impossible not to circumscribe individual choice in an universal systems if the social costs have to be minimized.

How popular these policies may depend primarily on two factors. First, the idea of fairness. High taxes on smokers are relatively non-controversial because apart from individual choice, there appears to be no reason why anyone would smoke. On the other hand, while gluttony certainly plays an important role in incidences of obesity, it is hardly the only reason with obesity linked to multiple factors from poverty to presence of ‘food deserts.’ Second, how widespread and onerous is the regulatory burden. Only smokers are impacted by zoning regulations while soda tax or other such limits affect a much larger section of the society. In any case, smokers are a declining minority while obesity unfortunately has reached almost epidemic proportion. It is certain, therefore, that these kind of regulations would be met with widespread initial resistance though the long-term future remains hazy.

Finally, as India moves slowly but surely towards a universal healthcare system, such debates may acquire increasing credence. However, in a country which has always embraced an overwhelming role for the government, it is doubtful if esoteric ideas like individual freedom would register in the popular and political debates.

DISCLAIMER: This is an archived post from the Indian National Interest blogroll. Views expressed are those of the blogger's and do not represent The Takshashila Institution’s view.