By James Wigderson
Special Guest Perspective for the MacIver Institute
No wonder I don’t like cutting the grass. Putting a heavy blade on an engine that makes it spin really fast is dangerous. Just ask the state of Wisconsin’s Agriculture Department. From a press release issued last Tuesday:
“Whether you ‘mow the lawn’ or ‘cut the grass,’ the weekly task can be dangerous when not done with care. The Wisconsin Department of Agriculture, Trade and Consumer Protection urges people to think about safety before starting their riding or walk-behind mowers.
“Both types of lawn mowers can cause serious injuries,” said Sandy Chalmers, Administrator of the Division of Trade and Consumer Protection. “These injuries can include deep cuts, loss of fingers or toes, eye injuries, and even limb amputations.”
Yes, that’s right. We need a state agency to tell us that lawnmowers can be potentially dangerous. It’s amazing that some government agency hasn’t banned lawnmowers entirely yet, making them as much of an anachronism as lawn darts.
Well, then, it’s a good thing state government continues to sell life insurance in case we stick our heads in our lawnmowers’ rotating blades if we missed reading the government’s helpful press releases.
Yep, the state of Wisconsin has been selling life insurance since 1911. For one hundred years, Wisconsinites could talk to their friendly government agent, fork over a premium, and buy life insurance from the state of Wisconsin. I believe Teddy Roosevelt said at the time the program was created, “Speak softly and carry a big state-provided life insurance policy.”
Wisconsin is the only state that offers life insurance to its citizens.
Wisconsin started selling life insurance in response to alleged abuses by the insurance industry at the time.
Governor Scott Walker proposed killing the program slowly in the state budget. Walker’s plan would not have terminated the policies of anyone currently buying life insurance from the state. All 27,421policy holders (as of December 31st) could continue to pay premiums and eventually collect the benefits. Walker’s plan would only have prevented the state’s life insurance plan from enrolling more people in the program.
Ending the program for current subscribers would be technically difficult. As the Legislative Fiscal Bureau wrote recently, “…legislative action to terminate existing policies could potentially be challenged on the grounds that current policyholders have a contractual right and a right as beneficiaries to the continuation of the fund.”
My favorite part of the LFB’s analysis of the state life insurance program is the discussion of how long it would take for the program to end. “If the Governor’s recommendation is adopted, the fund would fully close at some point in the future after all current SLIF policies are redeemed. However, it is not known at this time when enrollment in SLIF would be anticipated to reach zero.” In other words, the program would end when the last policyholder redeems his policy by meeting his Redeemer.
You might think that a state life insurance program must be a program for the poor or the uninsurable. You would be wrong. The program is set up as direct competition with private life insurance providers, complete with similar rules for eligibility.
As the website for the state program explains, “The Fund is not required to provide insurance to all residents who apply. Consequently some substandard risks may not be eligible for insurance from the Fund. The Fund is required to operate in a manner consistent with private insurers with regard to policy coverage, medical examinations, and underwriting guidelines.”
Unlike the life insurance pushed by Ed McMahon before he cashed in his policy, the state’s insurance plan even requires a medical exam for applicants who are 45 and older.
Fortunately we are spared the annoying advertising campaigns. State law prohibits the program from having any agents and any advertising. Would you really want former Governor Jim Doyle interrupting Jay Leno with a talk on how you can protect your loved ones from the expense of your final days?
The only way to find out about the program is to already know about it. Shhh. It’s a state secret.
The program is entirely funded by policy holders. There is no subsidy for the poor. It’s just another cruel, heartless insurance company, only one run by the state of Wisconsin. “I’m with the government, and I’m here to sell you life insurance in case our high taxes kill you.”
Of course, like any government program, that could change in the future. Some politician could decide life insurance is a “right,” too. Probably the same politicians who believe in higher inheritance taxes.
And while state law requires all profits from the plan to be reinvested for the benefit of the policy holders, someday some politician is going to raid that segregated fund, too.
What are the policy holders going to do, sue the legislature? (Oh wait, that’s why Wisconsin owes the state’s patient’s compensation fund over $200 million.)
So we have a life insurance program that serves no public interest, competes directly with the private sector, doesn’t even accept everyone into the program, and is just a minor slush fund raid waiting to happen. Sounds like the perfect program for the Republican-controlled legislature to kill off (pun intended).
Instead, the Joint Finance Committee voted 15-1 to keep the program. Seven Republicans voted to continue this–Senator Glenn Grothman was the lone holdout.
Like most government programs, the state life insurance program itself does not need an insurance policy. It will never die.