Healthcare Insurance We Have Now Is Not Insurance

The healthcare insurance debate rages on in the United States, with President Obama in the middle of the lion’s den…a place nobody belongs. He’s a statist and he just can’t help himself, but that’s a topic for a different day.

There have not been many posts on Liberty Alert of late. There are two reasons for that. One is business. The real life of a no-name blogger is definitely at odds with the blog. The second reason post have been sparse lately is that I want Liberty Alert to be a place for original thinking, not just retreads of the crap spewed by the main-stream media, and non-main stream talking heads. I’m not always successful at it, but I try not to be sucked into the trap of basing my opinions (and blog posts) on the points made and developed by others. I like to try to use my own original logic here. Again, I’m not always successful at it, but that’s the idea anyway. That does not mean that I can’t take ideas and learn from others. I just want to avoid repeating the babbling of others. This means that sometimes I’d rather write nothing at all, until I have something original in mind.

I’ve been doing some travel to the Caribbean island of Puerto Rico this past week. Although Puerto Rico is a part of the United States, it is not a state, and has a totally separate culture from the mainland. Therefore, it’s interesting to read some of the opinion pieces in the local newspapers to get a unique viewpoint on national matters, especially the current healthcare debate.

One letter-to-the-editor I read in a Puerto Rican newspaper raised an interesting point. The way we pay for healthcare is not insurance at all. We call it insurance, but it really is not. It’s closer to pre-paid healthcare than insurance.

This letter made me contemplate other insurances that we have. The most common insurance that nearly everybody uses is auto insurance. Think of the contrast between how we use auto insurance versus health insurance.
Auto insurance has a set premium based on how much of a risk you present. This premium can be raised or lowered based on the risk assessment of the insurance company. However, you have the freedom to shop around and switch at any time. With auto insurance, there is a deductible. The insurance is meant to cover catastrophic events, not everyday maintenance activities. The insurance company does not pay every time you enter the auto body shop. Does this mean you should stop doing maintenance like oil changes on your car? No, of course not. The driver is still responsible for the upkeep of their automobile. The incentive for the driver is to do the maintenance in order to keep their car running well longer.
When an accident occurs, the driver is free to address the issue as they please. They can take the money from the insurance company and leave the damage on the car, or they can use the money to pay for repairs at any garage or autobody shop of their choice.
In addition to insurance, most new cars come with warrantees. These warrantees cover unexpected mechanical breakdowns, but the driver is still responsible for general maintenance.
Contrast this insurance model to our current healthcare insurance model. In our current health insurance system, we expect insurance to cover every trip to the doctor. We expect to take no financial responsibility for our own healthcare. We have no concern toward cost (since insurance is paying for it), and we have restricted choice. In essence, we ask the insurance company to pay not only for accidents, but for every oil change, tire rotation, brake job, radiator repair, tune up, etc. regardless of our lifestyle choices and risk. This is not insurance. I’m not sure what one would call it, but insurance it is not.