Fewer Helmets, Higher Healthcare Costs

(Photo: Ben Ferenchak)

We’ve written before about an unintended consequences of state repeals of motorcycle helmet laws: more organs available for transplant.  Here’s one more consequence, from Michigan, which stopped requiring helmets last year:

State legislators changed the law last year so that only riders younger than 21 must wear helmets. The average insurance payment on a motorcycle injury claim was $5,410 in the two years before the law was changed, and $7,257 after it was changed – an increase of 34 percent, the study by the Highway Loss Data Institute found.

After adjusting for the age and type of motorcycle, rider age, gender, marital status, weather and other factors, the actual increase was about 22 percent relative to a group of four comparative states, Illinois, Indiana, Ohio and Wisconsin, the study found.

“The cost per injury claim is significantly higher after the law changed than before, which is consistent with other research that shows riding without a helmet leads to more head injuries,” David Zuby, chief research officer for the data institute and an affiliated organization, the Insurance Institute for Highway Safety, said.

(HT: Kevin Murphy)

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  1. rationalrevo says:

    This is great. I love hearing these bikers talk so much about their “freedom” to go without a helmet.

    This is actually a good result I’d say. Here is your freedom. Is not wearing a helmet worth $2,000 a year to you? I hope so…

    Too bad that folks who wear helmets stil end up having to pay more as well, but that’s the nature of insurance…

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    • mickey says:

      Thats $2k per injury claim, not that they pay. Taxpayer subsidized stupidity. Honestly this is the worst think about Obamacare. Socialize the cost and its easy to make (bad) arguments that the gov’t has the right to dictate how you live.

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      • rationalrevolution says:

        Ahh, yeah, I see what you mean… skimming too fast.

        In that case the premium probably haven’t gone up a whole lot.

        I don’t really see you point about “ObamaCare” though. #1) “ObamaCare” doesn’t cover motorcycle insurance. #2) All insurance, by definition, “socializes costs”, that’s the whole point of insurance.

        The only thing that ObamaCare does is subsidize insurance for the poor, not for motorcycle riders…

        You might like my plan for health insurance reform, however: http://rationalrevolution.net/articles/restore_america.htm

        Basically it involves a single payer type system with three major funding sources: individual premiums, a risk adjusted sales tax, and risk adjusted employer fees.

        Basically the individual premium charged on a yearly basis would be the exact same for everyone, about $2,000, with subsidies for the poor.

        Lifestyle choice based risks would be accounted for via sales taxes, with the sales tax rates being different for different products. The taxes would apply to all products, from food to thinks like sporting equipment, vacations, ski lift tickets, or cars and motorcycles, etc.

        This way, people’s payment toward health insurance would be heavily based on their lifestyle choices. Things like motorcycles would have high insurance sales taxes associated with them. Things like motorcycle helmets would have a low insurance tax on them, or possibly none, to account for the fact that they reduce risk.

        Lastly, employers would pay an insurance fee based on their worker’s compensation insurance classifications, so that their health insurance fees would be related to the types of health risks associated with the nature of work that they perform. Thus a coal mining company would presumably pay much more per worker than say a retail store.

        This way, the funding for health insurance would be heavily weighted by choices people make, in a way that also isn’t intrusive to privacy like trying to collect data on people, etc.

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      • nobody.really says:

        ” Is not wearing a helmet worth $2,000 a year to you? I hope so…”

        “That’s $2k per injury claim, not that they pay.”

        To clarify, that’s the increased costs PER INJURY CLAIM, not the increased cost PER MOTORCYCLE RIDER. Thus, the post provides no basis for knowing the aggregate social cost of this policy change, or its likely effect on insurance rates, because it doesn’t tell us whether or not the number of injury claims have changed.

        I could well imagine that repeal of a helmet law might reduce the number of injury claims. Why? Because DEAD PEOPLE DON’T FILE INJURY CLAIMS.

        So, imagine that when the helmet laws were in place, Michigan experienced scads of claims by people surviving their motorcycle accidents, and each claim cost, on average, $5,410. And imagine that following the law’s repeal, Michigan experienced only one injury claim of $7,257 — and scads of motorcycle deaths. Whatever you may think of this trade-off, I would expect that it would cause motorcycle insurance rates to fall, not rise.

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      • nobody.really says:

        But here we must confront a REALLY contentious issue: If motorcycle riders have sufficient insurance to cover the cost of cleaning up their own accidents, should we have helmet laws?

        Should society constrain an individual’s behavior not for the purpose of protecting society from the harm the individual might do, but to protect society’s interest in the future good that the individual is likely to do as a worker, taxpayer, parent, role model, potential draftee during war, etc.)? That is, does the society that raised and educated me gain an EQUITY INTEREST in me such that society is justified in restricting my right to hurt myself?

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      • hydroxide says:


        “Should society constrain an individual’s behavior not for the purpose of protecting society from the harm the individual might do, but to protect society’s interest in the future good that the individual is likely to do as a worker, taxpayer, parent, role model, potential draftee during war, etc.)?”

        You see, that’s the paradox of the argument about supposed freedom: It speaks of individual freedom but at the end of it wants to strip the people of the freedom to decide to arrange certain matters as they see fit. In the end, that road doesn’t lead to freedom at all. It elevates one individual over all others.

        But your argument is flawed anyway: The doctor taking care of you cannot take care of anyone else at that time. The bed you occupy cannot be used by anyone else. You might argue that paying for the bed and services allows to “buy” more of these resources, but that doesn’t change anything at that time and place. More, it supposes that doing so requires relatively little money – but the capacity of the hospital might be exhausted – does what you pay suffice to build a new wing? Does it suffice to educate a new physician? Hardly.

        That helicopter trying to get you to the hospital in time will not be able to save someone else at the same time.

        Your “right to hurt yourself” is nonsense. It suggests that you are the only one affected and no one else has to suffer because of it. That’s a rather naive view of EMS and hospital services.

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      • nobody.really says:

        Hydroxide, thanks for the two critiques. They point in opposite directions – which nicely illustrates the tension.

        The first critique objects that that when society constrains an individual’s behavior in order to promote society’s benefit, we wrongfully intrude on an individual’s autonomy. The second critique argues that when an individual exercises his autonomy in a manner that consumes resources, that individual needs to be constrained lest he intrude upon society’s interest in conserving those resources (for used by others). In short, we need to defend individual autonomy against the claims of society, and we need to defend society against the claims of the individual.

        And hey – I agree with both perspectives. The trick is in balancing them.

        Often we rely on the price mechanism to mediate these conflicts. When I eat food, that food is no longer available to be consumed by others. But the price I pay for food sends signals, and provides resources, for the production of more food. True, it will take time to produce more food; there’s a lag between signal and response. But often entrepreneurs are willing to bear that risk, preparing food even before I give a price signal. Similarly, when I crash I consume the attention of resources of various medical personnel – and this eliminates the possibility that those people and resources would simultaneously be devoted to someone else’s medical conditions. But society provides financial mechanisms to pay for medical services (tax-financed emergency medical services reimbursed by insurance claims, etc.) True, it will take time to produce more medical personnel and resources; there’s a lag. But often med students and society at large bear the risk of training to become physicians or EMTs, and of purchasing ambulances, in anticipation of medical emergencies that they cannot foresee with specificity. It’s not a perfect system, but it seems to work.

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      • hydroxide says:

        When there is a lag in food production, a few days can easily be tolerated. In a worst case scenario, you could even go completely without food for a few days. So there is a tolerance for lags.

        On the other hand, if you need an EMS helicopter and none is available right now, that’s it – you’re off to meet the maker.

        So the consequences of a lag are quite different. Another example: If you start building tanks, fighter jets and warships once someone has invaded you, it’s a bit late.

        In all these cases, society makes a value decision as to where it is willing to tolerate a risk of lag and where it isn’t. Chances are that where human lives are at risk, the tolerance is smaller than where they aren’t. Where precisely the line is drawn is a value decision and it is made not the least through elections. Not accepting that decision is less of a sign of love for individual freedom, than a sign of inability to cope with living in a society in which compromises will invariably have to be made.

        As for your idea that “it’s not perfect but it works” – maybe, but what’s your standard for that? Plenty of indicators regarding public health in the US are traditionally on par with developing countries. Is that your standard? Life expectancy at birth is slightly higher in Cuba than in the US. Is that your idea of a working system to keep people alive and healthy? Maternal childbed mortality in the US is on par with Iran. At the moment. Because in Iran, it’s been decreasing significantly, whereas in the US, it’s been slightly on the increase.

        You say it’s working perfectly. But that’s a value decision. And it seems that a larger part of the electorate has disagreed with you.

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  2. Ray says:

    Michigan is an unusual state in that there is no medical cap on the catastrophic claims for those injured in accidents. There are studies saying that the health care costs, especially those related to automobile head injuries, are higher in the state of Michigan as health providers charge more for the services than other states. There is a move within the state to place a cap on the catastrophic claims (1 million is being bandied) about to assist in driving insurance costs down in the state.

    Furthermore, as a resident of the state, there are ads for all types of attorneys who help injured folks file claims with the Michigan Catastrophic Claims Association…and several of those lawyers focus upon injured motorcycle riders.

    This may explain the 22% higher costs in Michigan….

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    • Enter your name... says:

      A long-standing quirk of Michigan law doesn’t explain why the costs *in Michigan* this year went up compared to the costs *in Michigan* the previous year.

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  3. Rich says:

    I truly do not understand the rationale of requiring seat belts to be worn (enforced in Michigan to the point where you can be ticketed solely for that infraction) and yet the law to wear helmets on motorcycles was repealed for adults over the age of 21. Helmets are in place for the exact same reason; they are the best measure of protection possible for a motorcycle rider given that a seat belt is not an option.

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    • rationalrevolution says:

      For the same reason that we have any regulation of guns. The users of these things do a lot of lobbying against regulation, and the general public generally doesn’t care about the helmet issue, and there aren’t enough motorcycles for the insurance companies to out lobby the riders.

      The insurance companies have a much bigger interest in forcing car drivers to wear seat-belts due to the number of car drivers.

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    • Melissa Belvadi says:

      Can all car passengers be ticketed for not wearing a seat belt, or just the driver? If the law required all passengers to be belted but left the choice up to the driver on his/her own, that would be more equivalent to the motorcycle situation. Gotta match up the factors of risk, control, and consequences…

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  4. George says:

    Is effectively socializing health care? More organs available for transplant at the cost of increased premiums for everyone? Since, of course, insurance premium costs are inevitably passed down to the general population.

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  5. Mike says:

    How about only if you’re a registered organ donor you may choose to not wear a helmet.

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    • John says:

      Wonderful idea!

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    • Enter your name... says:

      That only offers society a benefit if the biker dies. I’d want them to carry insurance coverage that replaces their Social Security disability payments and nursing home costs and at-home care costs, so that taxpayers don’t end up shelling out ten million dollars because some guy wanted to feel the wind in his hair.

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      • James says:

        On the other hand, the SS system benefits from all the payments a now-deceased rider contributed to the system.

        Indeed, from what I’ve read this principle was a large part of the justification for the financial viability of the original SS system: most people would die before collecting anything. So instead of a Ponzi scheme (as often alleged by opponents), it was really a tontine.

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  6. Melinda Tomalo says:

    If we’re going to have publicly funded medical care for all, we need to acknowledge that people who behave recklessly are creating costs for everybody else.

    Why should someone have the right to ride without a helmet when the medical costs incurred via his or her selfishness would be enough to build a school or feed many hungry families?

    It’s assymmetrical – the motorcycle rider without a helmet gets all the fun benefits of a wind-in-the-hair experience, while everyone else assumes the risk.

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    • James says:

      But why should motorcycle riders be singled out? If we rank reckless behaviors by potential costs to the health care system, those who recklessly consume more calories than necessary and fail to get healthful amounts of exercise likely come somewhere near the top. So we obviously need food rationing and enforced exercise programs (boot camp, anyone?) to reduce health care costs.

      Even if we restrict our discussion to the automotive world, it’s been demonstrated* that people who choose to drive large, heavy SUVs and pickups are responsible for a disproportionate share of deaths & injuries, to a degree far exceeding the paltry $2K/claim discussed here. So why not make personal vehicles over say 2500 lbs illegal?

      *Wenzel & Ross, “The Effects of Vehicle Model and Driver Behavior on Risk”, 2005

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  7. schnitz says:

    Unless hospitals can start turning away uninsured or insolvent patients, health-care costs are already socialized.

    Try this: if you want the right to be stupid, guarantee that it won’t hurt the rest of us: either demonstrate some kind of coverage or wear a helmet. Perhaps a license plate sticker to attest to coverage, with penalties for dishonesty.

    Also, if you show up on a stretcher without a helmet or insurance, you have consented to be a donor.

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    • Rich says:

      The article does not mention it, but first person coverage is actually part of the conditions of not wearing a helmet in Michigan. From the linked document below:

      To legally not wear a
      helmet, a motorcycle operator must:

      1. Be at least 21 years old.
      2. Have at least $20,000 in first party medical benefits.
      3. Have held a motorcycle endorsement for at least two years, or have passed an approved
      motorcycle safety course.


      The problem with all of these conditions is that none of them are visible to the naked eye. A police officer in Michigan can pull an automobile driver over and ticket them for not wearing a seat belt in Michigan because they can see the infraction. The same would hold true for a helmet, were it a universal law to wear one. But that is not the case.

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  8. Donnie says:

    Shouldn’t the insurance companies have foreseen this and raised the rider’s premiums to cover the cost?

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    • Pshrnk says:

      That would be discriminatory against the poor who can afford motorcycles but cannot afford helmets. :-)

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      • Patrick says:

        It is a fact that insurance companies are in business to make money. Not to be nice. So, the biggest reason for the laws involving driving while intoxicated on alcohol becoming so much more strict is due to lobbying by insurance companies to get the stricter laws passed. I have no problem with the strict laws, it is probably a good thing for everyone. But, I ask the question, why aren’t the insurance companies fighting to make helmet laws mandatory everywhere? Could it be that it is far less expensive for the insurance company if you die thatnif you are seriously injured and require expensive treatment and re-hab? Something to think about. The insurance company is better off if you get killed.

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