Sunday, October 19, 2008

Obama's Car Insurance Plan

Key components of Obama's Car Insurance Plan:
  • No excluding of pre-existing conditions. If you wrecked your car in 1995 and apply for insurance, the new car insurance must cover and pay for your old wreck.

  • Insurance premiums for everyone, regardless of risk, must be equal. If you get into 3 accidents per day, you deserve to pay the same premium as someone who has never had an accident.

  • Your employer must provide each employee with car insurance. Failure to do so will incur substantial penalties.

  • Car insurance must be comprehensive. Preventive car care, such as car washes, oil changes, and regular interior cleanings must be covered in the car insurance. Failure to do so will incur criminal penalties.

  • The government must provide car insurance to everyone who is unable to afford the increasing premiums for car insurance. This will be done by raising taxes on successful businesses.

  • The "excess" and "greed" present in the private car insurance industry will be decreased by comprehensive increases in government bureaucracy.

6 comments:

Usama said...

This comparison is banking on the belief that everyone considers health care insurance comparable to car insurance. However some people feel that unlike cars, health care is something that everyone should have access to.

Regarding the 'no excluding of pre-existing conditions': I can understand how it might seem unfair for a company to have to pay for an accident that didn't happen under their care. But most people get insurance through their employers. If someone wants to change jobs because of a better opportunity, but suffers from some medical condition, then wouldn't allowing exclusions make it difficult for said person to change jobs and risk losing coverage? And just because someone steps into a plan with a disease does not sound any more fair than someone paying into health care insurance all their life and never reaping any [significant] benefits from it because they never got [significantly] sick. Well of course it's great that they got sick but what about all this money they unfairly paid into the system?

I don't see why an employer (assuming they're large enough, and have the money for it) shouldn't help pay for their employee's health care. It's in their best interest to keep their employees healthy, for obvious reasons. Anyway the government subsidizes most insurance plans, employers don't pay the full cost. The alternative would be a Walmart-esque move where employers can push their employees to apply for state aid, which means the government (and tax payers) bear the full cost.

And if we're going to ask employers to spend their money on health insurance, the best way to spend that money on health care is to use preventative measures (pushing incentives to exercise, eat healthy, etc.)

Regarding raising taxes to help subsidize rising premiums, I think what stings you most is that taxes are being raised on "successful businesses." I doubt the entire cost increase will be paid for by these taxes, but the employer should pay a percentage of that increase because again, these are its employees. Your writing makes it sound like the government is penalizing a business for being successful. It's asking the business to do the responsible thing and help pay for its employees' health care with the money they gained from their "successes."

I don't know what the details are on this "increase in government bureaucracy" to counteract the "excess" and "greed," but in general I think we both agree on the idea that bureaucracies are (whereas I would say "can be") bad and inefficient. Still, in a completely free system I find it hard to believe a company wouldn't be greedy with its earnings.

A significant weakness in Obama's plans include no clear information on how the government will fund this increase in cost and the insurance underwriting is an extreme that most people will not agree to easily.

By the way where did you get the information on Obama's health care plan?

jblackhall said...

Not to play devil's advocate, but: I had a car accident in 1995 and never got it fully or properly taken care of. Tomorrow I get in a new accident. If the insurance company can find a way to make it seem like my new accident was caused by a loose bolt from the old one, they won't pay for any of it AND my premiums will probably go up.

Having insurance not through employers makes a lot of sense to me, but for it to be possible, something needs to be done to reduce premiums. Part of the reason a lot of employees WANT their company to provide insurance is because their premiums are greatly subsidized. It might be better if we could remove the employers from the picture altogether so that (as Usama points out), someone won't have to worry about switching jobs. However, then you have to trust the employers to increase wages enough to cover premiums, which might be an issue. Then you also have to ask people to budget in health care costs, which they won't. They'll buy a new SUV, cell phone, or just alcohol and cigarettes.

Why would preventive care not be covered again? Seems like it's better for the insurance companies and better for the people. If you don't cover it, you're asking people to pay for it out of their own pocket, which they won't, which means it never gets done.

I'll end with a question. You don't seem to want to leave the growing population of unemployed, uninsured out in the cold. How do you propose we get them the medical care their need?

@Usama: From my understanding, as long as there's no lapse in coverage, insurance companies don't discriminated against existing conditions. This is why so many people get on COBRA or something while they're between jobs, even if they don't plan on using it. Usually if they do deny coverage for chronic conditions, it's for a limited time, like the first 6 months or so.

Sarah S. said...

Unfortunately, most of us don't choose to have "wrecks" instead of new working vehicles. Moreover, we all live in the same country and benefit, or not, collectively as it relates to health. We drive over the same "potholes" and can't see around the same "blind curves" towards what is coming down the pike to wipe us out. Under Obama's plan, companies who do insure their employees' "cars" will get a 50% rebate (if I'm understanding correctly) on that coverage; ideally, this will enable companies to cover their employees better and/or to contribute to a system that covers everyone without having to pay a great deal more than they are already.

Frankly, comparing health insurance and car insurance is a bit silly. While a good deal of the differences in costs to consumers is due to things like social class in both instances, you don't have to use a car. You can choose to live in a city and take the bus or other transportation; you can live close to your place of employment and bike or walk. Moreover, you can choose to buy any kind of car you want (or at least, can afford). Plenty of people drive "beater" cars even if they can afford nicer ones because cars aren't a priority in their life. Neglecting to have the best health possible, though, has somewhat different consequences: reduced lifespan, diminished mobility, huge medical bills, undue stress on family and friends. Enabling people to have good health benefits everyone; enabling people to have good cars benefits the car companies (at least, as far as I can see).

Peter said...

Sarah,

1:

A significant portion of the population does indeed choose to become wrecks through smoking cigarettes, drinking copious amounts of alcohol, doing illicit drugs, engaging in dangerous sexual practices, eating far more calories than is necessary, watching far too much television, et cetera. In other words, the choice is made not to take care of themselves.

On the other hand, a significant portion of the population chooses to take care of themselves by buying fresher food, exercising regularly, abstaining from dangerous sexual practices, refraining from smoking and excessive drinking, et cetera.

Do you really want to punish those who choose to take of themselves by forcing them to pay for the healthcare of the people who choose to get into wrecks? How is it fair to gouge the people who use little healthcare resources because of their smart living?


2:

Comparing car insurance with health insurance is silly? These two insurances are both insurance, and they work by the same principles of insuring an individual against future costs by an evaluation of their risk through underwriting and subsequently classifying individuals in risk categories (high, medium, low risk). You simply can not pervert the fundamental principles of health insurance and expect this new form of "insurance" to magically work. Consider what would happen if Obama did propose this kind of Universal Car Insurance Plan. The result is predictable: complete failure through bankruptcy.


3:

Access to an affordable car and affordable car insurance is a fundamental necessity for individuals in the United States to attain financial success and emotional and physical wellness. I don't think you can point to many people in the U.S. who are highly successful and have never had a car to drive to important places, such as to college, to work, to the grocery store, to relatives, et cetera. Frankly, the need, dare I say "right", to a car and car insurance is a case that is as easily made as the case for mandatory health insurance. How can you so carelessly diminish the multitude of people, some who live in suburbs or some who live in Rural America? Do you expect them to walk 20 miles into town to buy groceries since they do not have public transportation?

JD said...

that is actually the best explanation i have heard of obamas plan so far...got one for mcain's plan in the interest of equal exposure?

-Almost Dr J
xanga.com/rveblade

Aron said...

comparing Health Insurance with Car Insurance is definitely silly. owning a car is a choice but life is not.