Monday, December 21

The Democrats Horrible 'Health Insurance' - 'Car Insurance' Analogy

It seems that the Democrats are going to manage to force most of us to pay for health care for the rest. So I guess we are all going to learn the hard way what a bad plan they have come up with.

One argument Democrats have used to back up a Government requirement for citizens to have health care insurance is to compare it to rules that require all automobile drivers to have car insurance.
“What I think is appropriate is that in the same way that everybody has to get auto insurance and if you don't, you're subject to some penalty, that in this situation, if you have the ability to buy insurance, it's affordable and you choose not to do so, forcing you and me and everybody else to subsidize you, you know, there's a thousand dollar hidden tax that families all across America are -- are burdened by because of the fact that people don't have health insurance, you know, there's nothing wrong with a penalty.” - ABC
I find this analogy not only bad but worse, also very misleading.

After all, it is not a requirement that every person in America buy insurance but instead that all cars driving on the road have insurance.

Now if the Government wanted to lower car insurance rates, then requiring everyone in the US to have car insurance would be one way to do it. That would add millions of new premium payers. Given that almost none of them would ever collect on this insurance, given that they do not have cars, it would be little more than a tax on those who do not require the insurance now.

Also, another reason why comparing their push for mandatory health care insurance to auto insurance is a bad idea for them is because car insurance is actually based on risk, something the Democrats are loath to permit when it comes to health insurance.

After all, a person's car insurance rates depend on many factors, including:
  • The type of coverage desired
  • Where you get your insurance. You can buy car insurance across state lines (Mine comes from Texas. I live in VA)
  • The type of car you drive
  • Your age
  • The age of others in the house
  • Your driving record
  • The driving record of others in the house
Basically, what you way for insurance is calculated against the risk the insurance company thinks you are. There is the one issue that does generate lots of complaints, and that is the penalty for young drivers both in general as well as when there is a young driver in the house.

One issue that has always bothered me about car insurance is that in some states where I have lived I was required to purchase as part of the policy, uninsured insurance. (So much for the requirement to have insurance, right?)

One would think that health insurance rates would be based on a person's:
  • Present health and health history
  • Physical condition (Overweight, obese)
  • Type of coverage that they are looking for (All-inclusive, catastrophic only, or anywhere in between.)
  • Lifestyle choices (Smoking, excessive drinking, drug abuse)
And if they really want to connect health care to how the Government handles car registrations, then all you need do is look to New York State, which is using their role in car registrations as a way to get additional revenue from it's residents by forcing them to buy new license plates:
ALBANY — New York drivers will start paying for new license plates next year — whether they want to or not.

Beginning in April, car and tractor-trailer owners alike will have to shell out $25 for spruced-up license plates, by dictate of state leaders coming up with new ways to wring out revenue as an unprecedented budget shortfall looms.

The new plates, featuring a bold new gold hue and a highly reflective surface, will make the roads safer and “reflect New York’s force and its resilience,” according to the state’s commissioner of motor vehicles.

They will also generate $260 million in revenue and create more than 100 jobs — at the maximum security prison where inmates make the plates for up to 42 cents an hour. - New York Times
The blow-back in this case was so bad that the Governor has admitted that this action is little more than an asset grab from State citizens.
ALBANY — So much for that reflectivity argument.

Gov. David Paterson said Tuesday that the controversial new $25 fee on New York license plates was nothing more than a "revenue grab" and drivers do not need new license plates.

The state had hoped to bring in $129 million in new revenue by forcing drivers to get new plates when their vehicles' registrations expire. Paterson said the state moved up the date by a year to require the new license plates in order to raise revenue. - Democrat and Chronicle
This is how Government does motor vehicle registrations. Imagine the games that they are going to play if/when they get control of health care!

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Jack M. said...

Try - I publish some funny insurance quotes, maybe I'll write about this story as well

Tony said...

According to the market-research group Datamonitor, medical inflation is the reason for yearly increases of 8% in health insurance premiums. The steady progress in the development of new drugs, therapies and equipment used to diagnose medical conditions and the resulting costs are an obvious reason for this. This is understandable and everyone wants the latest in diagnostics and treatments. Equipment becomes obsolete with time and invariably the very words newer and improved mean a rise in cost.