There is no free lunch. As many times as we and other fiscal conservatives say it, some people can’t believe it, especially people who are members of the Democratic Party or lean heavily that way.
A final example came with the Biden administration ordering health insurers to pay for up to eight COVID-19 home tests per month for people covered by their plans.
“This is all part of our overall strategy to accelerate access to easy-to-use, no-cost home testing,” Health and Human Services Secretary Xavier Becerra said in announcing the mandate. “By requiring private health plans to cover people’s home testing, we are further expanding the ability of Americans to get free testing when they need it.”
But free for whom and for how long?
Insurers will not pay for these tests willingly, any more than they have paid for most COVID-19 tests administered in hospitals and other healthcare facilities. These costs are passed on to someone.
Either the expense of the millions of tests that have been administered, and the millions more to come, are factored into future health insurance premiums, or the government picks up the bill. Either way, this expense will eventually be channeled to the public in the form of higher insurance premiums, higher taxes, or both.
You can be sure that the insurance companies aren’t just going to let their profits go down. Neither should they.
When the government taxes what an insurance policy covers, it is also, in effect, taxing what that insurance policy will end up costing. The government can subsidize this cost to lower rates for the consumer, but these subsidies must be paid either in taxes now or, if covered by borrowed money, later.
Someone can serve you “lunch” and say “no charge”, but rest assured, either you will be hit by the bill later, or all the other diners around you – and those who come to eat after you – will come. look for your tab in what they are charged.
Gifts are never truly free.