Sunday, October 6, 2013

Car Insurance ≠ Health Insurance..But Why Not?

*This has nothing to do with current politics and policies (i.e. “Obamacare”).  This is something I’ve mulled about for years.   

When I log into my car insurance profile online, there’s a page that includes a list of all the “discounts” I have that reduce my monthly rate. 

·         Multi-Car Discount
·         5 Year Good Driver
·         Multi-Line Discount
·         Passive Restraint
·         Seatbelt Discount
·         Anti-Lock Brakes
·         Anti-Theft Device

These discounts represent steps an insurance holder has taken that reduce the chances, statistically speaking, that they will be involved in an accident.  These statistical truths benefit the insurance company in the regard that they know I will be less likely statistically-speaking, than others without these features, to cost the company thousands of dollars in insurance claim payouts (as opposed to perhaps an individual that has multiple accidents within the past year).  With this knowledge that behooves them, they logically employ Adam Smith’s famous universal human economics concept that “people respond to incentives” and offer discounts to customers for securing certain safety features such as equipment and safe driving practices – all in exchange for a lower premium. This gives the customer certain motivation to not only obtain certain proven safety features, but to be a better driver.  It’s a win for the customer because they obtain a lower insurance rate and it’s a win for the provider because they get a happy customer that statistically will only make them money (because they’ll statistically pay-out much less to them, or never at all). 

Of course everything is qualified with statistics because “acts of God” can occur to even the safest driver.  Obviously some people get sick.  Some people get cancer or are involved in tragic automobile accidents.  These may be entirely not their fault.  That said how many people are going to the doctors for minor sicknesses?  How many people are convincing themselves they need a doctor or medicine to get through the pain or illness, when perhaps relatively speaking they’re not suffering that much at all; or at least something an over-the-counter pain reliever could help out with?  How many people believe the commercial tell them they need –insert latest inane medication on TV-.  Of course my thoughts are subjective.  Perhaps everyone that goes to the doctor when they have just a common cold or take expensive prescribed medication when they could probably just have taken Aspirin actually do need that type of care.   I don't know because I'm not a certified doctor, but I’d venture a guess not though.

I’m not trying to be a heartless tyrant here…but I am suggesting to health insurance companies…why not reward your customers that don’t cost you payouts.  Why not reward a healthy individual who hasn’t had a doctor’s visit in the past 10 years.  Sound crazy?  Why?  You may say because it's discriminatory against certain individuals with prior conditions but automotive insurance companies have been doing that exact thing for millenia; regardless of fault!  They assess premiums exactly based on driver history.  Look above…I have a “5 Year Good Driver” discount.  Why not offer healthy people a “5 Year Healthy Person” discount?  It’s the same exact thing.  Unavoidable risk is involved, but steps the individual takes can vastly help mitigate those risks – and the auto insurance companies leverage that personal responsibility into incentive for a customer to give them business.  
What incentive do I have be healthy, or live a healthy lifestyle?  Sure there are the generalities like wanting to stay in shape, avoid illnesses or premature death, or opposite motivators like not wanting to use up sick leave.  These aren’t fiscal motivators though (don’t underestimate fiscal motivators) – more like not wanting to get into an accident because you want to avoid crunching up your car and having to go through the hassle of getting it fixed.  There’s no positive motivator there however, just an anti-negative ones.   I don’t know, maybe instead of looking toward health insurance reform we should be looking at who’s insuring our cars and their ideas.

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