What If Health Insurance Were Like Car Insurance?
Consider your body an automobile with legs, a pedestrian transportation unit. Your legs are your wheels, food is your gasoline, your skeleton is your chassis, your eyes are your headlights. Basically, your body is a high-tech machine.
Every machine requires maintenance. People expect to pay something to keep automobiles and other high-tech machines in running order. Drivers pay for gasoline, for tires, for oil changes. It’s just a fact of life. Why muck things up by getting insurance involved? Surely it’s quicker – and cheaper – to leave insurance out of the equation.
So it should be with health insurance. You pay for the small stuff, the trips to doctor, routine medication, eyeglasses, etc. – perhaps a thousand bucks a year. For big ticket items your insurance kicks in.
Insurance would be for things beyond your control, say accidents or serious infections. Or perhaps you’d like to purchase a “parts and labor” warranty, in case something goes wrong with the engine (heart) or you need a new transmission (hip replacement).
This model is similar to a high-deductible insurance plan, the kind many self-employed individuals purchase. Under a specified amount, the patient pays all medical expenses. Above the pre-set limit, insurance pays. There are high-deductible plans beginning at the $1,000 deductible level, with higher levels also available at even lower premiums. A $5,000 deductible is a cost-effective choice for many self-employed workers.
These plans are much less expensive than traditional insurance. The difference in premiums can be tucked away in a health-savings account to cover low-ticket items. Hopefully, with time, your savings increases, allowing you to choose a higher-deductible (and therefore less expensive) plan.
Doesn’t this make sense? For the first $1,000 to $5,000 (whichever plan you choose) you’re spending your own money, which gives you a strong incentive to economize. Better to ration your own care than depend on someone else to do so. If you come down with pneumonia or need your gallbladder out, your insurance kicks in.
Naturally, you want to remain healthy and stay out of the hospital. That’s strong incentive to take care of yourself. Plus, you maintain the highest degree of freedom yet still have a safety net in case of emergency.
The incentive to limit one’s own expenses is what’s missing from government-sponsored health plans such as Medicaid. Somehow we need to find a way for everyone to have a stake in the expense. Is it fair to ask those who are actually working to economize when those who are not working receive unlimited care at no cost?
Everyone needs to pay something or the system will become unsustainable – it nearly is already. “Free” health care ultimately increases expenses for everyone.
Making health insurance like car insurance won’t fix everything, but it is a step in the right direction.