Tuesday, July 7, 2009

Car Insurance and Health Insurance

Well, at least on the Facebook feed of this blog, there was a good bit of discussion on yesterday's blog--talking about reform. One point that came out--and this is not the first time it has come out--is personal responsibility and the comparison between the personal responsibility for car insurance (with no one suggesting a public financing option) and the question we have about the appropriate degree of responsibility for health insurance.

With car insurance, driving is a choice. Consequences of not driving--probably some places it would be hard to live, but you could still do okay in many places. What type of car we drive--a choice. How well we maintain our car--a choice. What type of gas we use--a choice. Everything is a choice. Everything is the individual's responsibility. If you have an accident, in most cases if you remain a safe driver for long enough after the accident your rates will go back down.

Does health insurance work the same way? Let's begin with whether being healthy is a choice. We might say "Sort of". Some people choose to behave in ways that are truly and clearly unhealthy. Individuals need at least some minimal level of health or they will become a burden to others that someone (or society as a whole) will have to pay for. So that's a bit different than driving.

Otherwise, many things about our health and health care utilization are a choice--but some are purely random. And some are hereditary--clearly not a choice. If you have an illness early in life that predisposes you toward being more likely to be ill later in life, you can take steps to keep yourself as healthy as possible, but there are simply some things that cannot change. You essentially become high risk for a lifetime rather than only high risk until you have proven that you deserve to be considered low risk again.

So, while there is a lot to be said for personal responsibility and accountability, we still need to recognize the differences between car insurance and health insurance and think about how that would lead to the need for a market that might look more like the car insurance market but is likely to maintain a variety of unique elements.

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