Car Insurance vs. Health Insurance

Scott Shreeve, an MD and progressive Health 2.0 thinker over at Crossover Healthcare , pinged me on this discussion yesterday. He’s trying to help people understand and see the difference between Health Insurance and Health Care. “People need both, but it blurs to the point of confusion when you try to mix the two in a single financial instrument. Most insurance provides for catastrophic coverage of health related risk, however, it does not function well as a financial instrument for ongoing maintenance,” he writes.

Absolutely. Thus, the idea of applying the car insurance paradigm here is afloat. Check out this great article onHappy_car putting principles of auto insurance to work for health insurance. The idea is that auto maintenance and auto insurance for catastrophic events are two different things, and the same should go for health care vs. health insurance.

“Consider your car,” Shreeve explains. “You have auto insurance which is primarily for major crashes, and then you might purchase a separate from ongoing auto care (typically a warranty services) for ongoing or routine maintenance. Some high-end cars, like Mercedes and BMW, actually build in the ongoing warranty and preventative services into the prices of their cars and offer it as ‘free’ to the consumer. The point is, the ongoing maintenance is viewed as something different than the car insurance.”

The Contingencies article talks at length about people with chronic illness, who obviously need health service most. One angle the author presents is the (somewhat unfortunate) example of a single mother, whose uncontrolled Type 2 diabetes and obesity lead her to multiple ER visits and a “long list of health care [needs].” The point being that with automobiles, “access to low-priced insurance that takes care of every possible repair, including damage already done, … [and] regardless of whether she changes the oil (takes care of herself) in the interim” is unthinkable — because it makes no financial sense, and is therefore simply unsustainable. Using a car insurance model, on the other hand, the insured would receive discounted rates and perhaps more extensive coverage as incentives to “change the oil.”

OK, but what about all of us PWDs who take meticulous care of ourselves — but are nevertheless “sick” for life? We kind of constitute a gray area here, I think.

“Routine care and ongoing treatments of chronic conditions can be pre-funded, can even be subsidized, but they don’t constitute ‘insurable events,’” the article notes. Some of this is semantics, I suppose, as long as ill people can afford the care they need over the long-term.

“Yes, health insurance involves the sacredness of human life, and is therefore different from auto insurance,” the author notes. “[But] as sacred as health insurance is, it’s still an economic transaction that has to be balanced by individuals and societies, against other economic choices.”

So Scott Shreeve’s question to me, as someone who lives “in the trenches and with the expenses of ongoing health care” was: What are your thoughts about a new type of dual-product system that provides you the security of Health Insurance, but also offers separate access to affordable, high-quality, ongoing Health Care at reasonable rates? The additional “service pack” would include the ongoing provision of patient support, advocacy, care coordination between the myriad specialists, and other related “value-added services.”

All I could say was yes, yes, yes! Of course we could use a new model for service that helps deliver the best value/best outcomes for people with our specific condition at the best price. But how exactly would this be accomplished? TBD. Many talks between many bright minds are taking place behind the scenes at this very moment. Shreeve would love to hear thoughts from our community.

Are your needs being met by your current insurer?” Shreeve asks me at the end of his initial email. Well now, considering I’ve had three different health plans in the last four years, that’s a whole ‘nother story…


19 Responses

  1. Scott
    Scott March 13, 2008 at 8:22 am | | Reply

    Of course, a key element has not been addressed, regardless of whether we’re discussing Health Insurance or Health Care. What is it? The defacto business standard of exclusions for “pre-existing conditions” which, in essence, render it impossible for people with diabetes to obtain Health Insurance or Health Care plans — they simply will not sell either to a person with a pre-existing condition. These policies enable insurers and healthcare providers to cherry pick the people least likely to become ill, thus making them both more money.

    So far, the only Presidential candidate to even address this issue is Mrs. Clinton — the rest talk about it as if it simply will happen by some kind of magic pixie dust, or based on common, goodwill towards mankind. In a for-profit business model? Don’t count on it — it has to be legislated.

  2. Erin
    Erin March 13, 2008 at 8:47 am | | Reply

    I think if this other tier of health care existed, insurers would have some incentive to provide it to customers with “pre-existing conditions”, since not everyone would opt for catastrophic and maintenance insurance, so the insurers wouldn’t be taking the same kind of risk. Maintenance insurance would also help prevent some of the kinds of catastrophic health issues that arise after long neglect of maintenance.

  3. Kathy
    Kathy March 13, 2008 at 9:03 am | | Reply

    I’m with Scott–this needs to be backed up by legislation. Corporate goodwill is great, but it’s voluntary. And other parts of the system need far more work in order for any sensible reworking of health insurance to happen.

  4. saramy
    saramy March 13, 2008 at 12:42 pm | | Reply

    Previewing your Comment
    Having my health and being compared to a car and car insurance and car care is radically offensive TO ME. And the example of the poor diabetic woman was beyond simplistic and insulting! Health care and insurance are not like other consumer goods. Yes, health care costs money but it should certainly not be a part of the rest of our capitalist society. There is a huge, underlying and primary conflict of interest with insurance companies that have, as their primary reason for existing to make money for their shareholders. Insurance companies do not exit to serve the public good, they exist to make money and we should be clear about this. Basic health care should be as fundamental a right in this country as voting but it certainly is not. We get weighed down and hung up in the alarmist discussions of government provided health care vs. the current system and never once do we discuss how completely immoral the current situation is where for profit insurance carriers make the rules and tons of money. Most certainly we need to discuss what we need and what we want and what the country can afford. We need to understand that our interests in maintaining good health will probably not be adequately served because of the inherent conflict of interest in the current system. So go ahead and enjoy some doctor’s clever little analogy to car maintenance, but undertstand – it’s mixing apples and oranges, good in a salad, but completely misses the point. Health care is absolutely not a consumer issue like the pair of shoes I’d like to buy or even the car insurance I purchase and I am absolutely not anything like a car no matter how well I maintain myself in order to stay out of the emergency room.

    Oh yeah, and by the way, after 44 years with this very complex disase, I am very healthy but I’ve had to fight with insurance companies on so many occasions it makes me sick.

  5. Lauren
    Lauren March 14, 2008 at 12:36 am | | Reply

    Getting insurance companies OUT of the health care system is essential. I worked in a medical clinic for years and fought with insurance companies for every procedure our patients needed. Patients whose cancer was in remission could not get PET scans (a test to see whether the cancer has recurred) paid for without a positive dx of cancer. “Rule out malignancy” was not an acceptable dx. If the scan found that the patient was cancer-free, the patient was stuck with the whopping bill.

    My own insurance policy would not cover insulin, even with my dx of type 1 diabetes, because “non-generics” were not part of my plan. As for glucometers, syringes, insulin pens, and test strips, they must be New Age folk remedies, because my plan deems them non-covered expenses.

    There are many, many, many ghastly, immoral, and often tragic examples of insurance companies’ denials of service to those who need it most. Even if you buy a policy and expect it to cover you in the event of an emergency or health catastrophe, the insurance companies still pick and choose what they’ll pay for. One of our patients who had a lymphoma biopsy was stuck with a gigantic bill because, while the surgery itself was covered, the hourly charge for the surgery suite was not.

    More insurance is not the answer; that is why I disagree with Hillary’s plan. I am in favor of health savings accounts, which make sense for diabetics whose plans don’t cover test strips and other necessary supplies. Unfortunately not everyone can open a health savings account; you need a “health savings compatible” insurance plan in order to do so. I think everyone should be able to open one, just like an IRA or 401k, and I believe medical expenses should be tax-deductible.

    The statements expressed above are exactly true: the exclusion for preexisting conditions is just one horrible example of the insurance industry’s stranglehold on our broken system. How can it possibly be morally acceptable to deny coverage to the sickest individuals, the people we really need to be taking care of? The for-profit health insurance model is deeply flawed, and in my opinion should be illegal.

    I recently read that fire departments used to be private and for-profit — if your house was burning down but you didn’t have a plaque on the side of your house stating you had paid your subscription to a firefighting company, you were out of luck. Fortunately, the government realized that this service was too important and fundamental to leave to private industry. The same is true for health care: the “bottom line” has to be people’s lives, NOT a figure on a balance sheet.

    Sorry for the long post but I feel quite strongly about this subject.

  6. Rafael
    Rafael March 14, 2008 at 1:12 pm | | Reply

    Got refused 3 times for life insurance. I’m 23, got a A1C of 6.8.
    I never got compared to a car thought, only answer I get is I’m a too big of a risk..

  7. Erin
    Erin March 15, 2008 at 11:03 am | | Reply

    I really appreciate what saramy said. I think health care needs to be viewed in a completely different model than how it is currently being viewed. I think as people with a chronic illness, we are in a particular position to advocate for a change in the model of health care the U.S. employs. We would do a lot for our cause if, as we engage in these dialogs with various health professionals and politicians, we insist on discussing health care in the context of a basic human right.

  8. InsureBlog
    InsureBlog March 19, 2008 at 7:17 am | | Reply

    Mandatory Insurance: Are We There Yet?

    By the way, I’m not the only one who’s giving this some thought of late: both Jason Shafrin at the Healthcare Economist and Amy Tenderich at Diabetes Mine have some intriguing ideas on the subject, as well.

  9. DensityDuck
    DensityDuck March 23, 2008 at 11:25 am | | Reply

    As with others, I don’t think this is a good comparison–simply because it’s possible to drive your car with extensive damage. If you cut your arm open with a butcher knife, would you just put a piece of duct-tape over it and go back to work, or would you go to the doctor? However, there are people driving around with the entire bumper missing from their car–in an accident they will be much more severely injured as a result.


    And don’t think for a second that auto-insurance will actually cover expenses. I recently got hit in a parking lot; a mirror was ripped off the car, a fender was scuffed, and a wheel was cracked. The insurance inspector claimed that all of these things were obviously the result of different accidents, meaning that they had to be filed under separate claims–and that each claim was below the deductible, meaning that the insurance company didn’t have to pay out anything at all…

  10. Adrian
    Adrian October 16, 2008 at 3:59 am | | Reply

    Is there any insurance intermediary company in the health insurance sector like in the car insurance sector like Budget?
    I got refused many times just as Rafael and think an intermediary company might be able to sort out the problem…
    Any help is appreciated.

  11. Polite Dissent » Grand Rounds (Volume 4, #26) - The Roundup

    [...] from newborns. (link: Junkfood Science) Comparing car insurance to health insurance. (link: Diabetes Mine) The average retired couple should have $225,000 socked away to cover health care costs. (link: In [...]

  12. Shaun
    Shaun October 22, 2008 at 7:55 pm | | Reply

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  13. mark
    mark October 23, 2008 at 1:55 am | | Reply

    that post was great, it really helped with finding good car insurance comparisons, I found another good one that helped me find an incredible rate

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  14. Sharon
    Sharon November 12, 2008 at 10:00 pm | | Reply

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  15. Deborah
    Deborah December 18, 2008 at 7:27 pm | | Reply

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  16. dolly
    dolly January 28, 2009 at 12:26 am | | Reply

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  17. Future Generali
    Future Generali January 30, 2009 at 10:24 pm | | Reply

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  18. Raquel Foster
    Raquel Foster August 31, 2012 at 11:43 pm | | Reply

    Very informative post about the comparison between health insurance and car insurance policies.

  19. Edward Moore
    Edward Moore February 3, 2013 at 7:39 pm | | Reply

    Both car and health insurance is very important in every person who are working for their living. The health insurance is for yourself and car insurance is for car’s security. We should get first the health insurance before car insurance.

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