It is common to hear opponents of single-payer health reform point out that if we bought health insurance the way we bought car insurance, we'd all be broke. Ezra Klein says this is a stupid analogy:
1) You Can Drive Without Swiping Your Auto Insurance: This is the most obvious, and most important, difference. If your car required proof of insurance to start, more people would be insured. But it doesn't. Cops don't even ask for insurance when they pull you over. The only time insurance is relevant is when you're in an accident.Health insurance mandates, by contrast, make proof of insurance a prerequisite to using the system. To see a doctor, you do have to swipe your insurance card. To enter a hospital, you do need to show proof of insurance. In the Edwards plan, you'll need to enter your policy number on your tax form. If you can't, you'll be enrolled in the basic plan. This alone will reduce noncompliance dramatically, because compliance will be necessary to use the health system. Auto insurance, by contrast, is not necessary to use a car.
2) Car accidents are less likely than flus: Everybody reading this has been to the doctor. Most reading this have never been in a car accident. People are not unaware of the relative rarity of those events. It's easy to skip car insurance under the theory that you will not need it. It will be harder to skip health insurance under the theory that you will not need it. (This is Obama's argument. The danger is that people will skip it until they do need it, as explained here.)
3) We do not subsidize auto insurance: At least so far as I know. By contrast, all of the major Democrats, including Obama, subsidize health insurance to 300 percent or 400 percent of the poverty line. If lower income folks were given help on auto insurance, more would purchase it. As it is, they will be given help on health insurance,and so more will purchase it. This isn't rocket science. It's also one of the useful things about a mandate: The very fact of its universality means a hue and a cry will go up if the government doesn't ensure affordability. Thus, the government has to ensure affordability, or publicly dismantle its mandate. My hunch is it will do the former.
This seems very muddy to me; Ezra is flipping back and forth between talking about using the car, and using insurance. If you restrict the comparison to the use of insurance, most of his objections are moot. Sure, you don't have to show your insurance card to get your car repaired, but they won't let you drive it out of the garage again unless someone has paid; and similarly, they will treat you without insurance, it's just that you'll get an ugly, monster bill.
And while car accidents are less likely than flus, most people should be doing routine maintenance on their cars at least as often as they go to the doctor, which is precisely why free-market types like the analogy: it clarifies the distinction between other types of insurance that are used to cushion against catastrophic events, and the weird way that Americans use health insurance to essentially prepay for largely predictible expenses.
The real reason to distinguish between car and health insurances to my mind is that one of them allows you to do something we think of as optional (drive), and one of them allows you to do something we think of as a right (live).
Nonetheless, I think it's very useful to compare the markets, and policy responses to failure therein. Do mandates work to ensure universality, or something close enough thereto? In the market for car insurance, they do. Most people get insurance because it's illegal to drive without the stuff, even if they're reasonably sure they'll never be in an accident. Yes, some small segment of the population is uninsured. But they're mostly poor or irresponsible people who wouldn't have contributed much money to the system anyway.
That's why, even assuming that the market failures such as adverse selection are actually serious problems, there's no reason to think that we need every single person in the country to be insured in order to fix them. The adverse selection problem will disappear before the uninsured do; markets can tolerate some level of non-compliance.
Remember that almost all of the people you're worried about not complying will almost never show up in a hospital; anyone who's actually sick and uninsured will presumably jump on community rating. So this isn't a problem about system access; few of them will try to swipe that card. It's a finance problem: what we're really worrying about here is that we can't take money from those young, healthy, uninsured people in order to subsidize the older, sicker people who buy insurance. But as I pointed out above, the people who will fail to buy health insurance under the new system are almost certainly the kind of people who have very little ready cash to contribute to the system. So it seems unlikely that the overall effect of their absence would be large.
EK was quoted: Cops don't even ask for insurance when they pull you over. The only time insurance is relevant is when you're in an accident.
Uhm...huh? Maybe the precise laws vary by state, but in Colorado, the first thing a cop asks for is, "Driver's license, registration, and proof of insurance, please", and all three will be carefully checked when the cop returns to the cruiser. In fact, a car's Tax Receipt & Vehicle Registration slip requires the titled owner to sign a declaration on the back that the car has proper liability insurance. No signature is a misdemeanor traffic offense, a signature but no insurance makes the titled owner liable for perjury against the state, and the lack of insurance is a class B misdemeanor independent of the other.
(There is a 30 day discretionary grace period in which the ticket(s) are generally waived if there are mitigating circumstances -- i.e. proof is supplied to the court that the vehicle was properly registered and insured at the time of the citation, and the involved party is not a habitual offender in this regard.)
Of course, it's worth noting that the state-required insurance is strictly to cover the liability aspect, i.e., any infringement against the property and safety of others. If the vehicle was purchased with borrowed money, the lien holder will require accident coverage or provide it for the borrower at his or her additional expense. Otherwise, a person can destroy a car without any accident or comprehensive insurance coverage whatsoever.
"it clarifies the distinction between other types of insurance that are used to cushion against catastrophic events, and the weird way that Americans use health insurance to essentially prepay for largely predictible expenses."
I don't really see a problem with mandatory catastrophic health insurance. We're going to try to save someone's life in the trauma center regardless of papers. But I do have a problem with mandated "the kid's nose is running, lets take him to the doctor" insurance. That is just a recipe for wasted resources, especially with all the information about treating common ailments available on the web now.
"mandated "the kid's nose is running, lets take him to the doctor" insurance"
This is exactly what they are talking about. For some reason, most people equate health insurance with health care. Those who know better continue to do so as they push this type of insurance.
but they won't let you drive it out of the garage again unless someone has paid; and similarly, they will treat you without insurance, it's just that you'll get an ugly, monster bill. - Megan
I'm really not clear what the point of this argument is, but obviously this is a flawed comparison: they will let you walk your body out of the hospital without paying. Getting a "monster bill" is not comparable to not getting your car back, since poor people will simply not pay the monster bill, and will instead get wrapped up in the process of applying for Medicaid. Obviously, it is much more efficient to simply enroll the uninsured people in Medicaid when they walk in the door, as Edwards's plan does.
what we're really worrying about here is that we can't take money from those young, healthy, uninsured people in order to subsidize the older, sicker people who buy insurance. But as I pointed out above, the people who will fail to buy health insurance under the new system are almost certainly the kind of people who have very little ready cash to contribute to the system.
This, too, doesn't seem right to me. First of all, there's already a problem of young, healthy people taking their chances and not buying insurance; I don't see why this would disappear. Second, community rating is going to mean the price of insurance for young, healthy people may be higher than it would be under systems that discriminate according to demographics. That may lead some of them to drop out. Or will the subsidies provided in the Edwards/Obama/Clinton plans take care of this problem?
All I know is, these plans are supposed to be like the Dutch system, and the Dutch system has a mandate. When I moved to the Netherlands, I was told immediately: you have to buy health insurance; it's the law. In my case, of course, the implicit penalty if I didn't do it was the threat of losing my legal resident status, which is a pretty good incentive; the incentive for citizens is presumably less strict. But still, whatever percentage of people might be inclined not to buy insurance and to free-ride on the system, some significant portion of them will buy insurance if you make it the law that they have to, just because people tend to obey the law. The measures for noncompliance suggested by Edwards seem pretty logical to me.
hm...huh? Maybe the precise laws vary by state, but in Colorado, the first thing a cop asks for is, "Driver's license, registration, and proof of insurance, please", and all three will be carefully checked when the cop returns to the cruiser.
Indeed. MD and NJ too. When Ezra gets the first thing wrong about auto insurance, it makes it hard to take any of his arguments seriously.
the implicit penalty if I didn't do it was the threat of losing my legal resident status, which is a pretty good incentive
Except if you're talking about the USA, where we're constantly told it's wrong to give a ____ about the legal status of our "residents".
Ezra Klein is an idiot. This isn't the first blog entry in which he gets basic facts completely wrong- he does it all the time. The more I read him, the more I begin to believe he has an IQ of less than 100.
but in Colorado, the first thing a cop asks for is, "Driver's license, registration, and proof of insurance, please"
Indeed. MD and NJ too.
And Texas and Idaho. I believe the same is true of Utah and Louisiana.
Most reading this have never been in a car accident.
I read that and figured the guy has to be either from Manhattan or DC. Sure enough, it's the latter -- he certainly seems to have lost touch with his California roots!
I don't know where Ezra lives, but I'll speak up in his defense.
I am from Tennessee, where I have been pulled over once, and have been in the car three times when another driver was pulled over. Not once did the police officer ask for proof of insurance.
I've also been in the car when a friend was pulled over in a rural part of north Georgia and he not asked for proof of insurance either.
Even if it is their stated policy to ask, it seems clear that sometimes they don't. The last incident was about four years ago, so they may have begun enforcing the requirement more faithfully since then. I don't know.
JSinger,
I had the same thought when I read that. Almost everyone I know has been in at least one car accident.
Similar comment to anony-mouse: In New Jersey, the police insist on seeing an insurance card when they pull you over for any reason. As I once found out by painful experience, there is a fine for failing to have a valid insurance card to show the policeman even if you in fact are properly insured (the fine is much larger if you in fact did not have valid insurance when you were stopped, as opposed to having just left your card at home). Hence in New Jersey, you cannot afford to be without auto insurance unless you think you will never get stopped by police, and given the traffic policing in New Jersey, you can only reasonably assume that if you never drive even 5 m.p.h. over the speed limit.
VA does not require you to carry proof of insurance; maybe Ezra has been pulled over there. The companies send you these enormous proof-of-insurance cards that can't be kept in a wallet, which can be entertaining if you rent a car in another state and forget to bring your 4" x 6" card with you.
Still, his analysis of the comparison is silly because doctor visits for the flu are more like oil changes or new brakes than they are like crashes.
British Columbia has a government monopoly on auto insurance. (Liability insurance is also mandatory, which is as it should be.) The result is a system that is very expensive for everyone except bad drivers. Which means more bad drivers and therefore more car accidents. Fortunately, you rarely have to wait more than 24 hours in a BC emergency room after a car accident.
Oh, and to pile on, WA, OR, and MA all ask for your insurance when pulled over.
This discussion of comparative traffic-stop procedures is all very entertaining, but the issue here is health care...
But that's not the point. Yes, it's true that there are uninsured drivers out there (whether they are a "small segment" is debatable, but the distinction is irrelevant when the driver who hit you is uninsured). The point of demanding everyone have insurance is to have an insurance company that DOES have lots of money covering the liabilities of "poor or irresponsible people" who DON'T have lots of money. That's true of any insurance situation, be it auto or health.
I've said before why I object to the Edwards/Clinton "mandatory coverage" initiatives: the problem isn't the mere fact of the 45 million uninsured out there. The major reason those 45 million are uninsured (in my opinion) is the exponentially rising cost of the actual health care they would be consuming, which the insurance companies (in order to be profitable) must pass along to their subscribers through increased premiums (which the poor cannot afford to pay) or decreased coverage (which denies care). Simply demanding those 45 million buy into a health insurance package is not going to solve the problem, it's only going to make those 45 million poor even poorer (if they can get the money by decreasing their spending in other areas) or criminal (if they continue to not buy coverage). It is not a solution to the root cause.
...Simply demanding those 45 million buy into a health insurance package is not going to solve the problem, it's only going to make those 45 million poor even poorer...
Just increase the tax on those evil rich to pay for it. Problem solved!
In all seriousness, though, I agree that the real issue is the cost of health care. I think a major contributor is the very presense of health "insurance" as the major method of paying for services.
Most people paying via insurance are not as sensitive to the costs of the services they are buying because the insurance acts as a middleman between patient & doctor - they are not writing that check themselves (the same obfuscation factor can be seen at work in the concept of a tax refund being seen as "free" money to a lot of people).
Also, in a similar way the patients are not the real clients of the doctors - the insurance companies are. You & I don't influence the prices of care like the insurance companies do, which allows them to wield market power like a big union (or Wal-Mart) does: consumers don't have a choice in medical care like they do with other markets because insurance companies are the ones mandating how much they will pay providers and how much we will pay them.
I like the idea of having an actual insurance policy for catastrophic or long-term problems, and paying for my routine stuff myself.
Thus, the government has to ensure affordability
Which is of course terrifying to anyone who understands government and markets.
Getting hungry is even more common then getting the flu. And not eating is even more likely to lead to death than not going to the doctor.
So I guess Ezra is also in favor of "food insurance" for all. I I go to a restaurant, I just want them to feed me with no questions asked...I mean, I'm a human being, dammit!
my opinion regarding auto insurance, its obvious that its all a political scam that should be obolished, if a person can afford insu. thats fine,but those who can't are screwed. If we are all responsible for our actions then we should be insuring our actions not our cars.I can take a gun down the street and shoot someone without being insured for my actions,and so on and so on. If everyone was held acountible for theire action as our for fathers entended it to be when the constitution was signed then we would'nt be having these ridicualess conversations about who to blame. All these secondary law's are depriving us from our very cival liberties that this country was founed on.
I'm doing some research on the right to drive a motor vehicle without a drivers license,if any one has any information on this subject i would like to hear what it is.i can be contacted by e-mail @ scottlloyd.wil1@yahoo.com
thank all of you for your opinions.