When I take my car to get its oil changed, they never ask me for my insurance card. Same thing when I get my 60,000-mile service. But go to a doctors office or hospital, and its a different story.
Some people say thats the problem. They think the right analogy for health insurance is car insurance. The analogy goes something like this – health insurance has been misused because health insurance should cover catastrophes and not routine maintenance. Car insurance doesnt cover routine maintenance; it covers a crash. It doesnt cover the oil change; it covers the fender bender. In the same way, health insurance should cover the health equivalent of a car accident, but not the health equivalent of an oil change.
The analogy has a gut-level appeal. Insurance is insurance. If health insurance worked like car insurance, it would do a better job of keeping catastrophic events from costing people their life savings. If it worked more like car insurance, people putting their health at risk would have to pay a lot more for their insurance. If it worked more like car insurance, maybe we wouldnt be struggling under the costs of the health care system.
Heres the thing: I dont think the analogy works. That is, I dont think the situations are analogous.
For starters, lets look at the routine maintenance (thats not covered). How much routine maintenance is required, and how much does it cost? For cars, this is a question of the individuals judgment and discretion. If you customize a car such that it requires more frequent maintenance or if you buy a car that requires more expensive maintenance, well, you made your own bed.
For health, though, its also a question of the individuals luck. I have a friend who was born with diabetes. Routine maintenance for him is insulin shots and blood tests. He didnt do anything to get diabetes, but under the car insurance model of no coverage for routine maintenance, he would pay a lot more than I do. Or take someone born with cystic fibrosis. They require not only more regular maintenance, but lots of specialists – meaning theyd be on the hook for very expensive maintenance. They didnt pick a BMW, but they have to pay as if they did. The car insurance/health insurance analogy doesnt work because the car owner got to pick their car (or got to pick not having a car), while people dont generally pick their disease.
Lets also look at why we have insurance in the first place. The way car insurance works, my irresponsibility about maintenance will have limited effect on you. If I dont get routine maintenance on my car, well, that doesnt have any real effect on your life. Itll cost me more in the long run, but it doesnt affect you. If I dont get routine health care, though, well, thats going to cost you. When an individual doesnt get routine health care, they are more likely to end up in the emergency room – and when they get to the ER, we accept them. We take them, we treat them, and we do what we can to get them through the night.
If you show up at a body shop with a broken-down car, we all know what youll get if you cant pay – nothing. And we think thats fair. But if you show up at the emergency room with your life on the line, and you cant pay – well cover it. Because thats the kind of society we are. We think having a good life is fundamental in a way that having a nice ride is not.