How Car Insurance Can Act As A Roadmap For Healthcare Reform

October 26th, 2009

The health insurance debate has been a major news item for the last several months, and politicians on both the right and the left have begun comparing a proposed "health insurance mandate" to the car insurance mandate that the United States government passed in the early ‘80s. This analogy is problematic, though, because car insurance coverage is handled entirely differently from health insurance coverage. Each form of insurance seeks to accomplish very different goals. Nevertheless, there are similarities between the two programs that may help to shape the course of American health care.

First, it's important to note that there are very significant, unavoidable differences in health insurance and car insurance coverage. The ability to drive is considered a privilege. Auto insurance is mandated based on the idea that if a person didn't want to pay for car insurance coverage, he or she would be free to simply stop driving a vehicle. Health care coverage is obviously different. People can't choose to avoid living in their own bodies. Car insurance coverage is mandated to protect drivers from causing damage that they can't pay for, while health care coverage would potentially be mandated to protect individuals from diseases, acts of God, etc. The reason for a health care mandate would thus be entirely separate from the reasons for a car insurance mandate.

However, there are similarities between mandated health insurance and car insurance, despite their major differences. For one, the government hopes that mandated health insurance coverage could provide lower insurance premiums for customers, along with well-rounded coverage. Supporters of the health reform point to car insurance as an example of these benefits. States have been involved with car insurance coverage since the '80s, and have made dramatic changes to the ways that car insurance companies work. These changes are preventing insurers from steering customers, requiring them to provide adequate protection and eliminating untrustworthy car insurance companies. Supporters of government mandated health care hope that some of the changes that helped to make the car insurance industry trustworthy, reliable and affordable will carry over into the health insurance industry. Health insurance may even see more dramatic changes with the introduction of things like a public option and requirements for employers to purchase plans.

Car insurance and health insurance are extremely different, and regardless of your feelings on government-mandated health care, it's probably inaccurate to compare the issues outright. Nevertheless, it can be very helpful to look to the car insurance mandates in different states for examples of mandated insurance that works to keep customers' costs down and keep private insurers afloat. While the insurance types are different, it's certainly possible to draw reasonable comparisons.

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