Tuesday, June 22, 2010

A smart bill to fight smoking

Los Angeles Times editorial "A smart bill to fight smoking" (June 22nd, 2010) offers another endorsement of another paternalistic bill that would increase deadweight loss in society. Specifically, it advocates the coverage of anti-smoking programs. It offers two ludicrous claims.

Some people might object that smokers choose their unhealthful habit. But since insurance covers the cancer and emphysema that result from cigarette use, it makes sense to help smokers when they decide to quit.

We should note that the above statement, while sounding innocuous, has an unintended consequence: it makes becoming addicted less costly. Corrections conjectures some subset of people who do not smoke, or try drugs such as heroin, because they fear the consequences of becoming addicted. If cigarettes were no longer addictive, then the cost of becoming addicted would be lifted, and we would observe more smoking from this crowd. Whether or not it is larger than the number of people who would stop smoking is an empirical question. Obviously, an insurance program serves the same purpose.

We can discuss whether or not more people being able to smoke would be a good thing--Corrections posits that if it were, then competitive insurance companies or cigarette companies would be willing to set such a thing up, and therefore our system is clearly less efficient, but the point is tangential.

We should further add another point the Times offers that is empirically contentious.

Less smoking means less chance of catastrophic illnesses that are much more expensive to cover; lower rates of disabilities that taxpayers end up footing the bill for; less secondhand smoke; and even less litter.

The first claim, that less smoking means lower insurance is unclear. Indeed, for the people who would quit because of the lower premiums, we should have seen them already quit, if insurance companies can discriminate on smoking behavior--this would therefore make the statement of the Times patently untrue. People who smoke also die younger and more quickly, and the costs/benefits to society appear to be a wash (for example, they pay to social security but do not collect as much as were they a nonsmoker).

We should finally add that such coverage is not free. Individuals will have to pay for it. The Times appears to pretend that by requiring insurance companies to pay for these new treatments, they are somehow "free" to consumers. Prices will rise, and there is no such thing as a free lunch.

Corrections recognizes that the set of benevolent or honest paternalists is zero--if Rothbard noted that government was "a band of thieves writ large," we would be benefitted by noting that paternalists are, to coin a phrase, "slavemasters with a smile." In articles such as this, the Times earns its paternalist credentials.

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