It is a beautiful day. He is driving down a highway and picking up a nail in his tire. A few miles later, his tire is running low, so he stops at the local garage and plugs it in for $10. They suggest that he buy new tires before next winter.
It’s been 3 months since your last oil change. Since it’s a nice day, he stops at the Lube Stop and spends $50 on an oil change.
In fact, the day is so nice that you fill up the tank and go for a long walk in the countryside.
On the way back you notice your brake pedal is down so plan on relining the brakes in the near future before the rotors go bad, another $75.
What is missing from this equation? He didn’t consider asking his auto insurance to cover the expense.
Now, what if car insurance was like health insurance?
Imagine new laws requiring all gas stations to file an insurance claim every time you fill up the pump. But good news: you no longer need to pay upfront. Tires, gas, and oil changes are now covered by your auto insurance.
Under the new regulations, the gas station has to wait 30 to 60 days to receive payment. Of course, the office worker filing the claim wants his weekly paycheck. The person who reviews the claim does too. The insurance office has shipping, utilities and rent, not to mention that they expect to make a profit. Some claims would be denied or lost, so the gas station would naturally charge everyone a little more to cover the losses.
Do you think the price of gas would be higher or lower? Does it really cost more or less to provide the same service?
Suddenly, your $800 for gas and maintenance has doubled, or more.
The station owner is angry that he has to hire more help, wait to get paid, and deal with unnecessary hassle.
At least initially, you (the client) are happy, until you get your insurance bill, which has increased by $1,600 to cover the new services.
But by the time you get the bill, you’ll have gotten used to the free gas. Hmm, maybe if you drive more it will make up for the increased premiums. You’ll get new tires more often, as long as your insurance allows it. And, of course, you’ll want the best: no misplaced brand will do.
This scenario is exactly what happened with health insurance. And so, the premiums skyrocket more and more. Does any of this make sense to you?
It doesn’t take a genius to see that when everything is “free” the “need” is infinite. Of course, nothing is free, it just seems so. You are still paying through a third party. And if you’ve already paid, you want the best, AND you don’t want to pay an extra dollar for it.
Of course, your insurance will take into account your shareholders and should generate a profit, even if it goes against your best interests. Soon only generic oil and knockoff tires will be covered, not to mention cheap gas. All this at double the price you used to pay.
Makes you want to go back to the good old days, doesn’t it?
Copyright 2010 Cynthia J. Koelker, MD
