The comparison between automobile insurance and health insurance gets brought up every now and then, and should give us all something to think about. Zach Krajacic has an excellent article in the Christian Science Monitor today, pointing out that if we had automobile insurance that covered every little thing that could go wrong with our cars, the premiums would rise dramatically, and we’d have a “car insurance crisis in America.”
I tend to agree with Zach, but I can see some issues that people might raise to counter his arguments. First, a car isn’t essential to life, but a healthy body is. It’s feasible for a person to spend an entire lifetime without a car (and thus without paying for car insurance). But there is a physical body carrying each of us around every day, and we can’t just choose to do without it. That said, it is possible to go a lifetime without receiving health care and still be quite healthy. There are people in remote corners of the world who do just that. Of course they are the exception, rather than the rule. But so are Americans without cars. So while people will raise the argument that car insurance isn’t essential (because some people don’t have cars) while health insurance is, I agree… but this is a moot point for the vast majority of Americans, given that most of us have cars, and thus a need for car insurance.
Another issue is the lifespan of a car. Personally, I drive a car that was manufactured before most of America knew who Bill Clinton was. But that makes me the exception to the rule as well. Most people don’t keep cars anywhere near that long. As a country, we tend to buy a car, keep it and maintain it for several years, and then trade it in for a newer model. We have car insurance to protect our assets in the event of an accident, but we expect a certain amount of outlay in the form of car payments and maintenance that we’ll have to shell out ourselves. And we tend to trade in our vehicles long before they need serious repairs. We don’t have this option with our bodies. We only get one, and it has to see us through for the long haul. If we abuse it or neglect it or get tired of it, we can’t trade it in for a newer model. So while maintenance and basic care is important for a car, it’s essential for a healthy human being. And as time goes by – especially when people have been less than diligent at the basic maintenance – the repairs and tune ups for humans get a lot more expensive.
Car insurance companies are making a profit. They base rates on individual characteristics like age, gender, and driving history. They deny policies to people who have an unacceptable risk history. And although some people choose to not have a car and skip car insurance all together, the vast majority of Americans continue to drive, and to have a need for car insurance. In Colorado, if a person chooses to go without health insurance and then ends up with a catastrophic medical bill, bankruptcy will be the likely outcome. Same story for a person who chooses to drive without car insurance and then causes a serious accident, except that the person driving without car insurance will also be facing legal action for making that choice (in Colorado, all drivers are required to carry liability auto insurance, but health insurance is not mandated by law).
Health care elicits a far more emotional response in people. People who consider it perfectly acceptable for car insurance companies to cover only catastrophic, future (ie, not pre-existing) events find it deplorable when health insurance companies use the same model. Same goes for basing rates on factors like personal history, age, and gender. And when it comes to car insurance, we’re all on a somewhat level playing field, as it doesn’t tend to be a job-related benefit.
I find the car insurance/health insurance comparisons interesting, and am curious to see what our readers think about this topic.