Wednesday, July 22, 2009

Not that you will read this anywhere in the story, but there is a big difference between being forced to buy auto insurance and being forced to buy health insurance.

Auto insurance consists of two (major) components: liability coverage and comprehensive coverage. The former, which all drivers are required to have, protects other drivers if you don't have the money to pay for accidents you cause. In mandating that drivers have liability coverage, society is saying that you're allowed to drive only if you can prove that your stupidity or carelessness will not result in a financial loss to other drivers.

However, there's no requirement that you purchase comprehensive coverage that pays to repair your own car if you're at fault, society leaves it up to individuals to decide whether or not they want to accept that risk. And for those that don't buy that coverage, if and when they're in an at-fault accident, they have to dig into their own pocket to fix their car.

Health insurance is the equivalent of comprehensive auto insurance, you pay premiums in return for a promise to pay for fixing you when you get sick or injured. There's no health insurance component that is comparable to liability insurance.

So people who equate the two are being either devious or ignorant. Society trusts individuals to decide whether they want to buy comprehensive coverage for their cars, why not trust individuals to decide whether it is in their best interests to buy comprehensive coverage for their bodies?

And I'm opposed to this requirement even though I personally would probably benefit. A big chunk of people without health insurance are relatively healthy, and forcing them to buy insurance would subsidize those with higher medical costs... in the same way forcing people with great driving records to buy comprehensive insurance would likely result in lower premiums for people with worse driving records.

But it would be wrong.