Wednesday, August 13, 2008

Marriage & Insurance

There are a handful of economics articles relating marriage to a type of insurance contract, with an emphasis on countries where arranged marriages are common. This idea is as old as the earth. In fact until about the last 50 years most marriages were a form of diversification and specialization in household production. Now they are more consumption-based in the sense that experiences that make us happy are enhanced by a partner we like. But health care is a new dimension and has turned marriage back to the old model in the US. Couples are marrying because they need their partner's health insurance, but paradoxically, some are considering divorce so that ailing partners can qualify for subsidized insurance. Crazy, but two comments:

1. is marrying for health insurance all that different from the incentives folks are trying to reinforce into the tax code to incentivize marriage?
2. I'm always a little troubled by people who say things like "“Nobody should have to make a choice like that,” Ms. Moulton said. “What happened to our country? I don’t remember growing up like this.”"

I feel for Ms. Moulton, but people like Ms. Moulton (who considered divorce to qualify for subsidies for her kidney transplant) faced even greater difficulties in the past. As bleak as the current system may be for some it was in fact always been difficult for many people like her who were poor and in need of transplants or other very costly procedures. People too often look on the past with rose-tinted glasses. We usually see this type of reactionary response dressed in conservative morality, but Lou Dobbs has bred a new strain of it among progressives. Instead of romanticizing the past that never was let's work together for a better future.

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