By Jim Baxter, NMA President
One of the hot button issues dominating the health care debate is the proposal that all citizens must buy health insurance. Of course the health insurance industry thinks this is a great idea. What nobody wants to admit or discuss is that we already have a compulsory insurance system, for motor vehicles, and it doesn’t work.
The effects and influence of mandatory automobile insurance have been far reaching, and largely counterproductive.
Theoretically, the political elite wave their magic wand, mandate universal auto insurance coverage, and the multitudes that previously didn’t have insurance, usually because they couldn’t afford it, immediately procure coverage.
That’s the theory, the reality is quite different.
Obviously, those too poor to afford insurance still can’t afford insurance, especially because it has also become more expensive. So they drive without insurance. They get caught and their license is suspended.
They continue to drive, often because they need to get to work, and they get caught again. More fines they can’t afford, just like the insurance they couldn’t afford in the first place, and then they go to jail for failing to pay the fines.
Now the government gets to provide their room and board and when they get out of jail they no longer have a job.
Before long, the state legislatures start cranking out new bills and regulations aimed at coercing more people to buy insurance, forcing the insurance companies to sell insurance to people they don’t want to sell to, increasing penalties for not having insurance, and setting up multi-million dollar systems to track who has insurance and who doesn’t.
Finally, the state gets into the insurance business to sell insurance to people who the insurance companies won’t or can’t afford to insure — call it a public plan to compete against greedy private insurers.
The state insurance program goes deep into the red and the legislature decides the deficit should be covered by private insurers who refuse to provide affordable coverage to the “bad” drivers in the state insurance pool.
The private insurers decide to cover their new losses by adding surcharges for traffic violations, routine accidents, poor grades in school, age, neighborhoods, and less than sterling credit ratings.
Back come the legislators and they pass more laws outlawing the more irritating and profitable surcharges. The insurance companies respond by ceasing to do business in that state.
Competition declines, prices go up, and even more people can’t afford auto insurance. This is a great system, it’s a wonder it wasn’t adopted for health care a long time ago.