Written on Tuesday, April 10, 2012 by Nathaniel Davidson
Recently I needed a couple of car tires replaced. Actually, discovering that a screw had punctured one was a good prompt—leave it in so it plugs the hole for a little while—and the tread was getting worn, almost down to the legal limit. It was a few hundred dollars out of pocket. Wouldn’t it have been nice if my car insurance had covered it?
Actually, the answer should be a clear NO! What would be even worse is if the government forced the car insurance companies to cover new tires. In fact, the very idea is absurd.
Insurance is supposed to be about covering risks. That is, they should cover relatively unpredictable and highly expensive happenings that might happen to car owners. And they do this by charging a relatively low cost to a large number of drivers, so they ower the risk by dividing it.
Car crashes, third party personal property damage, and the other things insured are very expensive, but rather rare compared to the millions of cars on the road. But tire replacements—and other maintenance costs like servicing and oil changes—are not risks. Rather, they are inevitable costs of owning a car. So, covering these things is not the proper role for insurance. There is a place for saving money for these costs, but it’s the responsibility of the owners.
However, let’s suppose that the Government forced insurance companies to cover these non-risks. It’s not too far- fetched—leftist politicians (from both parties) act oh-so-compassionately by forcing others to cover the costs of their “compassion.”. Politicians might even try to pretend that compulsory new tire coverage is a safety measure.
But in reality, insurance companies have no money of their own, apart from the premiums of their customers. This means that the costs of premiums would need to skyrocket to cover these inevitable extra treatments. The motorists would really be no better off.
Actually, it’s even worse than this. Because I had to pay for the new tires out of pocket, I wasn’t going to buy them just because I wanted my car to look prettier. As long as the old tires had enough tread depth to be safe, I was going to keep them as long as possible, no matter how worn they might have looked. I.e. I practiced self-rationing. And because of competition, I could shop around for the best deal, and my tire center offered to match the best price to attract my business.
But if people don’t have to pay for the new tires directly, there would be a huge temptation to get new tires more often than they needed to. Inevitably, the premiums of all drivers would need to rise to cover this extra cost. And customers would have less incentive to shop for prices and force them down.
Here’s another possible mandate: force insurance companies to cover cars that have already crashed. What could be more compassionate than covering a pre-existing condition? Sensible people would realize that a car that has already crashed is no longer a risk, but an occurrence. And motorists wouldn’t pay their insurance until they had crashed. So what cost would a “premium” need to be? Of course, the cost of the repairs or replacement! Then if this were spread around to the fools who buy insurance before they crashed, it would make the premiums far more expensive.
We also couldn’t count on the insurance companies to do the right thing. Business collusion with the government is always the bane of so-called mixed economies. The more premiums, the more potential profit to be made. So insurance companies might not fight a “new tire mandate”. There are even worse things: paint and insurance companies colluding with the government to have a “new paint mandate”, so they will pay for a new paint job every two years.
Then imagine that these costs became so high that they are unaffordable to most drivers. Then politicians might step in to offer Government Car Insurance. Those who really think that the Government could offer more efficient car insurance than the private sector need their heads examined . But about half the voters fall into this category (the technical term is Democrats).
This doesn’t matter to the Ruling Class: yet another expensive government program empowering still more bureaucrats. But the poor motorists would find much worse service because of the lack of competition—long waiting time, more refusal of services, and rationing of payouts. There might also be “death panels” for cars above a certain age.
Real health insurance would be like car insurance: covering genuine health risks that require expensive treatment. Thus it would be hard to object for insurance to cover unexpected treatments like repairing bones after an accident, cancer chemo, surgery, serious diseases, transplants and the like.
Instead, the Federal and State Governments have forced insurance companies to cover predictable things like annual checkups and ob-gyn visits—which are not risks. Rather, they are on the same level as car insurance paying for tire and oil changes, or even refuelling. Even worse, there are also mandates to cover sex changes, breast implants, infertility treatments, wigs, marriage counseling and more. This is more like car insurance forced to cover paint jobs.
This might not be such a problem if there were real competition. But many states that impose moronic mandates also forbid people from obtaining health insurance from another state.
And of course, since customers are not paying directly, they demand more medical treatment than they really need. For instance, people see doctors for the annual self-limiting conditions of colds, coughs, and rashes, which require nothing more than over-the-counter medicines. That’s why both costs are high and waiting times are long.
None of this is a problem with the private sector, but with Government. And the government has imposed even more costs. Thanks to the unholy alliance between trial lawyers and Democrats, doctors must perform more unnecessary tests and procedures to avoid being sued by shyster lawyers like John Edwards who can manipulate gullible juries. And they must have huge malpractice premiums—more costs to be passed on to patients. Then it costs many hundreds of millions to develop each drug so that it passes the Government (FDA) approval.
We could solve all our health insurance problems by making it more like car insurance, which means getting government out of the way: no mandates and allow competition across state lines. Instead, Obamacare promises just what a government car insurance scheme would deliver: huge costs, long waiting lists, reduced quality, and medical care rationing.
After my tires were replaced and I was about to pay with credit, the nice young man asked for a photo ID. Hang on a moment: Obama’s Attorney General is persecuting states like South Caroline that demand that voters show their identity, because this is allegedly “racist.” But this incident just showed how harmless an ID requirement really is. Not only must I show my ID to get my tires replaced, I also need one to see my doctor, board an airplane, draw money from a bank teller, buy a gun legally, and even to donate blood. So why not for the great responsibility of electing our leaders?
When we consider that SC would offer ID free of charge, we see how absurd Obama and his allies really are. The only conclusion is that they are happy with voter fraud. Not surprisingly, most felons vote Democrat. More surprisingly, so do many dead people.
Oh, did I mention that the nice young man at the tire center was black?