What if health insurance were like car insurance?

Think of your body as a car with legs, a transport unit for pedestrians. Your legs are your wheels, food is your gas, your skeleton is your chassis, your eyes are your headlights. In short, your body is a high-tech machine.

Every machine needs maintenance. People expect to pay something to keep cars and other high-tech machines in good working order. Drivers pay for petrol, for tires, for an oil change. It’s just a fact of life. Why screw things up by involving insurance? It’s certainly faster – and cheaper – to disregard insurance.

It should be the same with health insurance. You pay for the little things, the doctor’s visits, the usual medicines, glasses, etc. – maybe a thousand dollars a year. For large ticket items, your insurance kicks in.

Insurance would be for things beyond your control, for example accidents or serious infections. Or you may want to purchase a “parts and labor” warranty, in case something goes wrong with the engine (heart) or if you need a new transmission (hip replacement).

This model is similar to a high-deductible insurance plan, the kind that many self-employed people buy. Below a certain amount, the patient pays all medical costs. Above the preset limit, the insurance pays. There are high deductible plans that start at the $1,000 deductible level, with higher levels also available at even lower premiums. A $5,000 deductible is a cost-effective choice for many self-employed.

These plans are much cheaper than traditional insurance. The difference in premiums can be tucked into a health savings account to cover low-ticket items. Hopefully, your savings will increase over time so you can choose a higher deductible (and therefore cheaper) plan.

Doesn’t this make sense? For the first $1,000 to $5,000 (whichever plan you choose), you spend your own money, giving you a strong incentive to cut corners. Better to ration your own care than to depend on someone else. If you get pneumonia or have to get your gallbladder out, your insurance kicks in.

Of course you want to stay healthy and stay out of the hospital. That is a strong incentive to take care of yourself. In addition, you retain the highest degree of freedom and still have a safety net in case of emergency.

The incentive to curb out-of-pocket spending is what’s lacking in government-sponsored health plans like Medicaid. Somehow we have to find a way where everyone has a share in the cost. Is it fair to ask those who actually work to cut spending when those who don’t work get unlimited care at no cost?

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Everyone has to pay something, otherwise the system will become unsustainable – it almost is. “Free” health care ultimately increases costs for everyone.

Getting health insurance like car insurance won’t solve everything, but it’s a step in the right direction.