HIV and Obamacare’s Perverse Incentives

But if you give unmarried mothers money, said the critics, you will get more unmarried mothers.

Ridiculous, said the proponents of the change. Being an unmarried mother is a brutal, thankless task. What kind of idiot would have a baby out of wedlock just because the state was willing to give her paltry welfare benefits?

People do all sorts of idiotic things, said the critics. If you pay for something, you usually get more of it.

C’mon said the activists. That’s just silly. I just can’t imagine anyone deciding to get pregnant out of wedlock simply because there are welfare benefits available.


Megan McArdle

McArdle’s extremely long essay is eight years old, but you really should read the whole thing if you haven’t. I was reminded of it this morning when I read Donald Douglas’ post on the sharp increase in reported cases of unprotected sex among gay men and Robert Stacy McCain’s reaction to it. The New York Times reports,

According to the Centers for Disease Control and Prevention, the number of men who told federal health investigators that they had had unprotected anal sex in the last year rose nearly 20 percent from 2005 to 2011. In the 2011 survey, unprotected sex was more than twice as common among men who said they did not know whether they were infected with H.I.V.

Part of this seems to be cultural. The face of HIV is no longer Tom Hanks in Philadelphia or an emaciated Freddie Mercury, so young people simply don’t remember how scary this disease was in the 80s and 90s. On an economic level, though, McCain’s take on the phenomenon within the context of Obamacare is instructive.

During the 1990s, however, treatments were developed that made long-term survival possible — but quite expensive — for the HIV-positive. This is why it was absolutely imperative that the Democrats (beholden to the gay lobby) forbid insurance companies to deny coverage for “pre-existing conditions.”

I’ll leave questions of morality aside here; I lean libertarian when it comes to these things. The point here is that Obamacare, by forbidding insurance restrictions on people who are already sick, actually gives incentive to the young and stupid to not take precautions when it comes to promiscuous behavior.

The obvious objection to this argument is that no one wants to become infected with HIV. That’s obvious to me and probably obvious to you, but if HIV/AIDS is no longer the death sentence that it was 30 years ago and someone can’t be denied insurance coverage because of it, what is the incentive to guard against it? Why bother denying present gratification against future risk if the risk appears minimal? Young men aren’t known for being risk-averse.

Economic policy creates unforeseen consequences. The more that government tries to create Utopia from the top down, the more human nature snaps back and proves the impossibility of the endeavor.





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