Unless you live on Mars or something, you've probably heard some politician comparing health insurance to car insurance. It sounds
like a good argument, but isn't
for several reasons that hit me last night in a rare moment of clarity. Here's a top ten list why that comparison just doesn't work..
1. Auto insurance is mandated at the State/local level. Nothing in the Constitution grants Congress the right to mandate something like this. A state law that requires me to have insurance that protects others is not analogous to the Fed requiring me to do something that funds my natural deterioration.
2. Auto insurance is mandated because
of a purchase, not just because you are
. States can say that automobiles on the public roads have to meet certain conditions. You are not forced
to purchase an automobile though. You are not forced
to live in a state that requires insurance.
3. Auto insurance comes in many flavors at many price points. You are not just limited to the couple of policies available from whichever company supports your state politicians the most. You can buy it from anywhere and the national, interstate competition saves money. If ObamaCare truly were like auto insurance, then opening it up for more competition would be required.
4. The comparison is not valid because mandated auto insurance covers the cost of someone else's car, and your car if you wish, in the case of an accident. Some policies may optionally include some medical insurance as well, but that isn't what the politicians are talking about. Saying that we can force
you to buy medical insurance because some people choose
auto insurance that also includes some of that is an argument that just doesn't make sense.
5. A car policy can do something that a health policy will not. It can "total" your car and force you to start over. That keeps price low. At the point that it costs more to fix a car than the car is worse, we go to Plan B. While there is no "re-do" or "just get another one" in our lives, we eventually do face decisions about the cost of extended life. Pelosi says that there will never be any limits on benefits in her plan. I think her nose grew a new zip code on that one. We all know the game. There are no such things as limitless benefits at capped costs.
6. Auto insurance covers the liability associated with damage due to what basically amounts to an illegal act. It may not be a felony, but it is a legal
matter to drive recklessly, cross the yellow line, not yield, or whatever. It doesn't cover rust. It doesn't cover new brakes. It doesn't cover a tuneup or new tires when the old ones wear out. Health insurance is not
like auto insurance. It's comparable to an auto warranty
. When you purchase an optional
auto warranty, it is covers maintenance items and things wearing out. It's still
a choice though.
7. The more complete my auto policy, the better off it is for you
if I cause an accident. Yet under proposed health plans, I'd be penalized
if my policy costs more than average. I'm encouraged to not
cover as much. It doesn't decrease the cost of the accident in any way, just my coverage.
8. With auto insurance, my rates go up depending on the cost of my vehicle and my driving record - my choices. If I'm in too many accidents or have an expensive car, I may just have to forgo insurance or a car all together. It isn't my neighbor's
responsibility to subsidize costs that in many cases are based on my
own choices. If I have medical costs related to the issues caused by others, there is already things in place to allow me to hold them responsible for their actions. My neighbor being held responsible for *my* choices is something totally different.
9. Auto insurance can't be purchased after
the accident to include past damage. That keeps prices low. A health plan that mandates coverage for pre-existing "damage" is going to drive prices through the roof. This will drive the good drivers (healthy people) to only purchase insurance from the companies that tailor plans to them. The high-risk folks will all be in a high-risk, expensive plan that they won't be able to afford without the "balance" of the young/healthy folks. We will end up with the status quo.
10. With auto insurance, the newer the car, the more it costs and the more expensive the insurance. Fewer and fewer people are purchasing new and/or expensive cars. Cars on the road are getting older and cheaper. The cost curve is headed down
. With health though, the older you get, the more expensive you are. We have this huge bubble of Baby Boomer hitting the most medically expensive times of their lives. This happens while simultaneously they are leaving the workforce and not paying payroll taxes into our existing public programs as well as the proposed new one. And a lot of them are doctors, so has you have the number of doctors going down, the number of patients will be going up. And, when you look at unemployment numbers, the younger you are the less likely it is that you have a job. As the "elders" leave the workforce, hiring of the "young'uns" should increase, but it won't be at the salary level of the retirees. And even then, there isn't enough qualified young (or unemployed in general) to take those positions. There are roughly 80 Million Baby Boomers that are retiring over the next 15 years or so. The Labor Department reports 15.7 Million unemployed. Even with the "bubble" of the Baby Boomers in the work force, we still can't keep current programs from heading into bankruptcy. When we take them out of the contributing work force and add them to the other side of the equation, it isn't going to work. We've been robbing Peter to pay Paul for a long time. We are about to have a lot more Paul's and a lot fewer Peter's making even less money. With auto insurance, I have some control over costs. I can eliminate them all together if I wish. With the health care proposals, I not only have no real control, but the entire thing is totally out of control to begin with. Even if every single uninsured person in American became
insured and paid their own way, the current public system is still a train wreck in the making.
At this point, any mental clarity I had has drained away. There was something else that was really, really good, but it's "left the building" and will probably never be remembered. It would kinda ruin the "top ten" aspect of the list anyway. :)