Patterico's Pontifications

10/24/2009

Why Can’t Health Care be Like Car Insurance?

Filed under: Health Care,Obama — DRJ @ 6:29 pm



[Guest post by DRJ]

I’ve heard and read that ObamaCare will be like mandatory car insurance. I know such pundits don’t literally believe in “Cadillac” health care but this approach glosses over real differences between how car insurance and the Democrats’ proposed health insurance will work.

Unlike ObamaCare’s anticipated mandates, not everyone is required to buy car insurance – only those who own cars and choose to drive on public roads. In addition, car insurance rates are adjusted based on factors like age, geographical region, driving history, tickets, etc. Reports indicate ObamaCare will prohibit discrimination based on pre-existing conditions and may not allow rate adjustments.

Car insurance protects drivers from catastrophic events – wrecks that result in property damage and/or personal injuries — but car insurance doesn’t cover drivers for routine costs like repairs and maintenance, or cosmetic costs like detailing. Car insurance could include all vehicle-related costs but it would be prohibitively expensive, primarily because the demand for services would skyrocket. The main thing that would stop drivers from getting a car wash every week, an oil change every month, or body work for every dent would be personal time constraints imposed by long lines because everyone wants to use those “free” services. But many would use every bit of those services and more.

Mandatory universal health care would cover Americans for catastrophic health events as well as the health care equivalent of repairs, maintenance and detailing. Some people see this as a good idea because it will make health care available to everyone. I think it will result in long lines and rationing for both routine and catastrophic services. I also fear that a health care system overburdened with routine demands will not be able to handle real emergencies.

So why can’t health insurance be more like car insurance? Because if insurance paid for every oil change and engine failure, we’d have an autocare crisis, too.

— DRJ

37 Responses to “Why Can’t Health Care be Like Car Insurance?”

  1. DRJ – If we had a government automobile insurance option like you describe, wouldn’t it be cheaper than private auto insurance because of those blood sucking, profit making, profit-making companies who only exist to screw their customers by denying claims so they can pay their executives ginormous amounts of money?

    daleyrocks (718861)

  2. scratch one profit making.

    daleyrocks (718861)

  3. This didn’t fit into the post so I’m adding it here: There are people who believe that some lives, like some cars, aren’t worth saving. Those are the choices you have to make with universal care, which is why I prefer an approach that really does treat car and health insurance the same by providing for catastrophic health care coverage.

    DRJ (dff2ca)

  4. Right on. Preach it.

    Anwyn (a130c1)

  5. DRJ:

    With all due respect, I kind of agree with what you’re positing.

    But, ultimately, in my mind, this whole health care debate boils down to one thing:

    Everyone deserves — as a right — health care because some have it and some don’t.

    I have a bit of a problem with that, because, pretty much everybody does receive health care. And if they don’t, they’re not taking advantage of systems already in place to provide it.

    I know that many who are much more knowledgeable than me, can cite statistics by verse that proves millions are dying on the street everyday because they don’t have health care.

    But I haven’t had to swerve to miss them lately.

    I think what we’re really talking about is quality of health care. Some people, indeed, do have a higher quality of health care, because of insurance, than others, who do not have insurance.

    So, my conundrum is this:

    If quality of health care is the question, then a government-enforced quality has to assure everyone is treated equally under the law.

    So, can someone explain to me, exactly, how Bill Gates and Juan Garcia are going to be treated, for the same ailment, equally, under the law of a government-enforced, national health plan?

    Or better yet, how is my child going to be treated equally with your child under a government-enforced, national health care system, when you, and your doctor, are taken out of the equation?

    Because, and make no mistake about it, that is what will happen.

    Others may come in an accuse me of being a troglodyte, but I challenge anyone to tell me of one governmental agency that works efficiently for the betterment of society in general. There’s a key word in that last sentence.

    If anyone really wants the society of “Harrison Bergeron,” I have no argument with you because, at least, you’re being honest.

    Ag80 (815bcd)

  6. There’s another big difference: The only mandatory car insurance is liability coverage – that is damage *to other people* that is *your fault*. If you own a car outright, you don’t need to carry insurance on your car. You can choose to take the risk that if it gets totaled and it’s your fault, it’s on your dime.

    This makes it not comparable. (You also can post a bond in California rather than having insurance; you just have to show the ability to cover the required minimum liability.)

    –JRM

    JRM (355c21)

  7. Read it and weep …

    The public option would effectively be just another insurance plan offered on the open market. It would likely be administered by a private insurance provider, charging premiums and copayments like any other policy.

    The only real difference is that it would have the deep pockets and stable of lawyers of the federal government at it’s disposal, so it could engage in “dumping” with no fear of economic repercussions, no fear of anti-trust.

    It’s pretty hard to go to court with the folks that make the laws.

    Neo (7830e6)

  8. Sorry, but I have to make one distinction to what I posted:

    I should have said:

    Others may come in an accuse me of being a troglodyte, but I challenge anyone to tell me of one federal governmental agency that works efficiently for the betterment of society in general. There’s a key word in that last sentence.

    Because, I honestly believe there are state and local agencies that do a good job.

    Ag80 (815bcd)

  9. I think too many people are making the mistake that this is all about health care reform. It is not. It is about control of you and yours and ever more dependence on gubmint. It’s like those who think cap and trade is about saving the planet, or going green. Again, nothing to do with it. It is all about controlling your every action. So when you approach the problem with logical arguments, you are missing the larger point.

    Gazzer (22ecdc)

  10. In reality, a major part of the cost of driving is currently paid by — our medical insurance. According to the Spine Research Institute of San Diego:
    In the case of whiplash we attempt to find out how many people who are at risk–which includes just about anyone who travels by car–ha[ve] chronic neck pain due to whiplash. Our research at the Spine Research Institute of San Diego indicates the number is probably as high as 10%. More interestingly, perhaps, was our finding that as much as 45% of persons with chronic neck pain attribute the pain to a past MVC injury. It is clear that motor vehicle crashes profoundly diminish the nation’s health and welfare…
    In many cases the problems do not begin until long after the injury; as much as it pains me to say this, this in effect means that our auto insurance rates are almost certainly too low. If they reflected the full cost, driving would be unaffordable for many if not most of today’s drivers. Our medical insurance*, however, is the “court of last resort” in paying for the long term sequelae of these injuries.

    *Plus out of pocket payment for non-covered services. Anybody want to bet on whether it will be legal for a doctor to accept private payment for uncovered services, or whether that will be illegal in the interests of “fairness”? Not to mention that once the Federal Government is the medical payor, fiscal prudence would then combine with the Green mandate (Copenhagen, anyone?) to reduce automobile travel and force auto insurance rates up to cover the true cost.

    Peter B (7a25cc)

  11. Sorry, here’s the link: Spine Research Society

    Peter B (7a25cc)

  12. Mandatory universal health care would cover Americans for catastrophic health events as well as the health care equivalent of repairs, maintenance and detailing.

    Should routine maintenance type of health care – dental checkups, annual checkups, breast exams, etc. – come directly out of our pocket?

    steve (e95f7a)

  13. I think there are several ways to deal with this. One way is for people to buy supplemental insurance. This will be more cost effective if providers can offer packages in several markets or nationwide. Another is for communities and state/local health care providers to offer low-cost screenings, immunizations, and clinics, something that is already happening in many communities. And people should be encouraged to save and budget for routine medical care. All of this helps keep costs under control and that benefits everyone.

    DRJ (dff2ca)

  14. Govt health care will probably cover crap like boner pills, fertility treatments, botox, acupuncture, spas, tattoo removal, sex change ops, unlimited psychotherapy and counseling, chiropractic, naprapathy, homeopathy, and every other weird thing you can think of.

    gp (213d8e)

  15. Should routine maintenance type of health care – dental checkups, annual checkups, breast exams, etc. – come directly out of our pocket?

    Quite frankly, yes, it should. One of the main reasons healthcare is so expensive is because “insurance” has gone from a hedge that covered catastrophic events to a “one-stop shop” where it’s used for completely minor and relatively affordable things like annual physicals. Sorry, but if someone can’t save up the money for an annual checkup they’ve got bigger financial problems than being able to afford health insurance.

    Making a visible price list for routine procedures mandatory would go a long way towards helping people make informed decisions about where to go for these procedures. That would actually create real competition as clinics and hospitals would have to offer their patients affordable treatments or risk being undercut by other institutions.

    Another Chris (470967)

  16. […] by KingShamus on October 25, 2009 I have nothing to add.  Just click the link to give Patterico some bloggy luv. I’ve heard and read that ObamaCare will be like mandatory car insurance. I know […]

    Health care versus Auto Insurance « Blog de KingShamus (c1f033)

  17. Should routine maintenance type of health care – dental checkups, annual checkups, breast exams, etc. – come directly out of our pocket?

    Why not? Are you bothered that people actually have to pay for a service — for such a basic service — they’re receiving? I mean good nutrition is part of maintaining a proper health regimen too. I think the government should cover the cost of my shopping at Whole Foods.

    Stress — or too much of it — also affects one’s health. I think the government should give me money to enable me to take more days off from a stressful job—-actually, come to think of it, since a lot of liberals have long had a big soft spot in their heart for the idea of Euro-socialized welfare, the preceeding suggestion may not strike them as a form of sarcasm.

    It’s no surprise so many in modern society have become almost punch-drunk from a self-entitlement mentality.

    Mark (411533)

  18. People often conflate “insurance” with “coverage.” This is a mistake; they are different.

    “Coverage” means that specified care delivered to the covered person will be paid for according to the terms of the policy, by its guarantor.

    “Insurance” means that an insurer has gathered together covered people of similar risk profile, done actuarial calculations on how much the specified care is likely to cost per capita, and charges a premium that covers that amount, plus administration, plus a reserve, plus profit (if for-profit).

    Clearly, a substantial minority of Americans are uninsurable at any reasonable premium. People with Class III or IV heart failure; overweight diabetics; breast cancer survivors; people who were badly injured in a recent car crash; smokers with high blood pressure; people hospitalized with mental illness… the list goes on.

    Some of these pre-existing conditions are “their fault,” some are due to Acts of God, and some are a mix.

    Insurance of some such people is possible, as long as they are a small proportion of the group being insured. “US employees of IBM” will have a few such individuals as employees and family members; as long as their expenses are reasonably predictable, those expenses can be spread out among policyholders (employer + employee premiums) without breaking the system. But many or most people with severe, expensive, chronic conditions aren’t members of such a group.

    While insurance of such individuals isn’t possible, coverage is. That is a question of ongoing subsidies. How much are these subsidies, and who will pay them? (And what is the Standard of Care that is to be provided under this coverage?) To the extent that a given level of health care is a right, such subsidies are entitlements. This year and every future year.

    While this aspect of Health Care Reform takes the form of “insurance,” it is not.

    It would be helpful in this debate if the proponents of the Reforms being pushed through Congress would call things by their right names. But then, a lot of other things (e.g. honest arithmetic) would be helpful in this debate, too.

    AMac (89db14)

  19. Should routine maintenance type of health care – dental checkups, annual checkups, breast exams, etc. – come directly out of our pocket?

    Why not? Are you bothered that people actually have to pay for a service — for such a basic service — they’re receiving?

    I thought “our pocket” meant ours, the taxpayers.

    cassandra in MT (84ff7e)

  20. For a good discussion of universal health care in other industrial democracies, I recomment TR Reid’s “The Healing of America” (2009). It’s part pro-ObamaCare polemic, but Reid provides a lot of useful information.

    He also highlights the moral issue at the heart of health care reform: Is a society willing to say “tough luck,” and refuse first-rate health care to people who are in a circumstance where they don’t have it, and can’t get it? Most OECD countries have answered, “No.” The US effectively answers “Yes.” (Note, I’m not talking about getting acute care at the Emergency Department, but about getting sustained care for chronic conditions, e.g. heart disease, Type II diabetes, lupus (Reid’s example).)

    The impulse behind health care reform is to chanage our “Yes” to a “No–everybody should have access to care”, and I can respect that.

    How to accomplish that (1) at a sustainable level of cost to society as a whole, (2) without damaging or destroying the good points of the US health care system, (3) without decreasing the quality of care and increasing costs for the majority of Americans — these are major policy questions. To my mind, Baucus’ bill, the HELP bill, and HR 3200 all fail on all three points. All ignore the Law of Unintended Consequences. All provide perverse incentives for misuse of resources. All drastically underestimate long-term costs. None acknowledge the utility of market-based pricing mechanisms. And none provide a mechanism for rationing and denying care — which is a part of every system. Secret, unacknowledged rationing is the worst kind, in my opinion.

    All that said, I can respect the humanitarian implulse that drives the advocates of ObamaCare.

    AMac (89db14)

  21. I have reservations about the Spine Research Institute and looked up the Director. I would be very suspicous of any statistics coming from them. I ran a trauma center for years and am up on the literature. The fundamentalist chiropractors attribute every known illness to spine maladjustment.

    You can get your routine care paid for by joining an HMO. If you want choice of physicians, especially for young people, high deductible insurance and paying for your own routing care is much cheaper. The big problem with this approach is that retail prices are totally screwed up by Medicare and insurance because they demand huge “discounts” and resist fiercely any attempt to go to a cash price system. It’s a bit like the supermarket “clubs” that charge ridiculous prices if you are not a “member.” At least in that case, anyone can be a member. They do it to use database marketing. In health insurance, there is almost no excuse for it except to punish the uninsured.

    As far as quality is concerned, I treated the uninsured along with the insured and made no change in how I treated people. Believe me, I have spent thousands of hours in the middle of the night operating on people that I knew would never pay me a cent. What did grate on me was the illegals who weren’t even appreciative because they knew they could get free care by going to the ER. It is against the law (EMTALA) to deny care to an ER patient.

    There is a lot of BS floating around in this debate. A lot of it is emanating from the single payer folks, such as the crap about thousands dying because they have no insurance.

    Himmelstein and Woolhandler have been beating this drum for years. I doubt they have ever treated a non-paying patient because they are salaried Harvard faculty. Like so many lefties, they don’t have to walk the walk.

    Mike K (addb13)

  22. Amac, the vast majority of the people who get care in ERs use them as primary care docs and do not have healthy lifestyles. They do not take medicines and do not attend the many community clinics that are there to care for them. I have spent many years as an attending physician at LA County and have ideas on how to do reform. Almost none of my ideas are included in the farce going on now.,

    The illegals are another problem but I don’t think anybody serious wants to provide them full care. If so, I suggest you run for office on that platform and see how many votes you get.

    Mike K (addb13)

  23. DRJ – If we had a government automobile insurance option like you describe, wouldn’t it be cheaper than private auto insurance because of those blood sucking, profit making, profit-making companies who only exist to screw their customers by denying claims so they can pay their executives ginormous amounts of money?

    Yes.

    I wonder why a public option for auto insurance has not been tried as a test case. I mean, people need auto insurance.

    Clearly, a substantial minority of Americans are uninsurable at any reasonable premium. People with Class III or IV heart failure; overweight diabetics; breast cancer survivors; people who were badly injured in a recent car crash; smokers with high blood pressure; people hospitalized with mental illness… the list goes on.

    they could be insured under policies that explicitly deny coverage for certain types of treatment.

    Someone who had suffered a heart attack should still be able to get coverage for cancer treatment.

    Michael Ejercito (6a1582)

  24. Michael – You disappointed me and took the bait.

    Many states have or have had insurance pools for high risk drivers (the non-standard market)and typically force regular auto insurers to participate in or subsidize the pool for the privilege of doing business in the state. People can also buy bumper to bumper warranties for their cars if they want to spend the money.

    daleyrocks (718861)

  25. I wonder why a public option for auto insurance has not been tried as a test case. I mean, people need auto insurance

    Most states have such an option, just as many states have one for health care insurance. Assigned-risk pools for people who are otherwise uninsurable. Not surprisingly, they’re more expesisve than a standard policy.

    The auto insurance analogy is inappropriate in any case. At least one hopes it is. A person can simply choose not to own a car. The only health care corollary for that is choosing not to breathe.

    Tully (c2f070)

  26. Mike K,

    Thanks for recounting your experience as a practitioner. It’s consistent with lots of people’s accounts.

    I accept that lots of uninsured people get their primary care in ERs. And that many don’t have healthy lifestyles (so many middle-class Americans are obese that unhealthy lifestyles must be a pretty common thing…).

    Like you (I think), I have grave doubts that human nature is so malleable that some flavor of near-universal coverage is going to transform a lot of unhealthy living. Making preventive care “free” is going to get a lot of presently-uninsured families to visit PCPs. So a lot of people will be hearing, “you should watch what you eat,” “you should get more exercise,” “you should check your blood sugar frequently,” and the like. That’ll lead to improvements in some people’s lives… though I think preventive-medicine cheerleaders are going to be disappointed by the modesty of the changes.

    Anyway…

    As far as illegals, it seems to me that the current reform packages are designed to include them under their umbrella.

    (1) While nominally excluded, multiple efforts to include some verification of residency status in HR 3200 have been voted down by the Democrats. Thus, “legal-resident-only” provisions have no teeth, and invite abuse–intentionally.

    (2) Pres. Obama has signaled that immigration reform is high on his list for next year. That term is a euphemism for “amnesty for illegal aliens,” even more extensive than Pres. Bush’s efforts (if such a thing is possible). So today’s “illegals” won’t be covered per se by health care reform–instead, presto, they’ll be Legals.

    These policies invite future waves of people to cross the Rio Grande (etc.).

    Which is one of the problems of ObamaCare. It’s an open-ended commitment to subsidize the health care of X million Mexicans, where X is an unknown but large number, and a number that increases over time.

    Fabulously wealthy societies can choose to do anything and everything that they wish, because price is no object. Is the U.S. that society? The various ObamaCare proposals agree that the answer is Yes! I wish I could believe that they are correct.

    AMac (c822c9)

  27. but I challenge anyone to tell me of one federal governmental agency that works efficiently for the betterment of society in general

    The key word here is efficiently. As we all know, gov’t in a democratic society is inefficient by design. However, I can still name a few that fit this description off the top of my head: NTSB, FTC, NLRB and (until recently), the FCC. I think you can make a fair case that in most instances these agencies have performed capably, if not efficiently.

    Dmac (5ddc52)

  28. DMAC – I have a different impression of the FTC, NLRB and FCC than you describe. It’s tough to characterize the NTSB since they have a seeming monopoly on accident investigations which sometimes appear to take forever and some of their safety recommendations sometimes seem pretty arbitrary.

    “The National Transportation Safety Board is an independent Federal agency charged by Congress with investigating every civil aviation accident in the United States and significant accidents in the other modes of transportation — railroad, highway, marine and pipeline — and issuing safety recommendations aimed at preventing future accidents.”

    From ntsb.gov

    daleyrocks (718861)

  29. It’s all very simple: much of the support for health care reform comes from people who just want everything free. That they’d have to pay for it, whether through higher premiums or higher taxes, is simply not a connection that is made.

    If you want free health care, why would you want just free health care for major stuff; why wouldn’t you want to see someone else pay for those annoying routine doctor visits?

    The very realistic Dana (474dfc)

  30. The very realistic Dana – Plus in the market for automobile insurance, consumers seem to accept differential pricing based on driving records and other risk factors. You don’t see the same clamor for community rating in the auto insurance market.

    Why is that?

    daleyrocks (718861)

  31. Plus in the market for automobile insurance, consumers seem to accept differential pricing based on driving records and other risk factors. You don’t see the same clamor for community rating in the auto insurance market.

    Why is that?

    People are uneducated.

    Michael Ejercito (6a1582)

  32. “People are uneducated.”

    Michael – You might be right. Perhaps they don’t want to subsidize the cost of insurance for teenage drivers, drunks, proven reckless drivers or other bad risks because it just doesn’t seem fair. Who knows.

    daleyrocks (718861)

  33. I agree with the comparisons you make between car insurance and health insurance but just wanted to lament the changes in technology that have made it near impossible to perform one’s own car repairs, requiring expensive specialists of all types just to keep it running smoothly. My coffee-drinking, gravy-sopping grandma died almost 30 years ago at 92 years of age with not a single prescription bottle in her medicine cabinet. I want the kind of healthcare she had, just like I long for the cars you can repair by yourselves. I’m afraid they’re both artifacts of history at this stage of our country’s progression.

    Chris (699c92)

  34. For car insurance, insurance commissioners provide an answer to the question, “What sort of insurance is just sufficient to be called ‘good enough’?” The answer varies by state; where I live it’s something like “Liability $10,000/$30,000 plus Uninsured Motorist $7,500; no Collision.” This bare-bones policy is cheap, compared to what a full-service policy would cost for any given driver.

    Consider this issue as it plays out for health coverage, where the focus is on pressuring state legislatures and regulators, and now Congress, to add mandates for more and different services.

    We have no answer to “what’s adequate, ‘good enough’ coverage?” As the current debate shows, this question is to our elites what table legs were to Victorians. The sort of thing that’s just not mentioned in polite society.

    Skyrocketing health care costs and unaffordable coverage seem like a small prices to pay for this peace of mind.

    AMac (89db14)

  35. #6 is correct: the purpose of mandatory auto insurance isn’t to protect YOU from accidents, but to protect OTHER DRIVERS from an accident that YOU may cause.

    If you don’t drive a car, you don’t have to buy auto insurance. The only way you can avoid paying for mandatory health insurance is to not live…and I, for one, am not ready for that yet.

    Crush Liberalism (9d23b9)

  36. Many states have or have had insurance pools for high risk drivers (the non-standard market)and typically force regular auto insurers to participate in or subsidize the pool for the privilege of doing business in the state. People can also buy bumper to bumper warranties for their cars if they want to spend the money.

    Ben (7b935f)

  37. Ben – That comment looks very familiar. See #24.

    daleyrocks (718861)


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