BHO has a point: Health insurance should be more like auto insurance

Picture this:  While driving down the highway, you glance up at the reminder sticker on the windshield.  It's time for an oil change.

You pull into the oil-change service's garage.  They drain the old oil, replace the filter, refill the engine with fresh oil, check it out, and tell you how much today's service will cost.

Try handing them your proof of auto insurance and see what happens.

The point is, what we call "health insurance" is more of a service plan.  Go to the doctor for a physical?  Bill the insurance company.

The origin of health insurance companies, euphemistically called health maintenance organizations (HMOs), big surprise, has its foundations in government.  What a surprise.  Know what else?  They were crafted to improve the quality of health care while keeping costs down.  With the backing of the federal government, HMOs were able to strong-arm doctors into signing up, lest the HMOs used their collective bargaining power to steer patients away from "scab" doctors and to doctors who were part of the network.

Notice anything troubling about such a system?  Doctors, once part of the network, were now partly owned by the HMOs.  To keep costs down, HMOs could nickel-and-dime not only patients, but doctors and hospitals.  What do you think happened when doctors and hospitals started to realize they were forced to operate their businesses at a loss?  They had to raise prices where they could.

Factor this in with multi-million dollar jury awards against doctors and hospitals for making "mistakes", causing malpractice insurance premiums to rise, and it's easy to see how costs have gotten out of control.  All because the government thought they were being compassionate by introducing the concept of collective bargaining to patients.  Yeah, look how well it worked for factories with unionized employees:  Increased costs, the supplanting of meritocracy with seniority-based advancement, etc.

Now, years after their conception, HMOs are demonized by the very government that created them.

Let's visit the oil-change shop.  How much does an oil change cost?  Depends on the quantity and quality of the oil.  Consider if the shop had to deal with a penny-pinching insurance company.  Insurance companies are motivated by profit.  While customer-retention is key to making a profit, eliminating costs is another key.  Let's say you wanted to replace the oil in your car with a high-performance synthetic, the theory being that engine parts would age and deteriorate at a slower rate, ultimately leading you saving money and not having to buy another car for a longer time.  The insurance company is motivated by profit, and they've thought of this too.  They'll run the numbers and opt to cover the cheap motor oil.  Why?  Because when repairs outweigh the value of the car, you'll buy another, most likely more expensive car, which will enhance the insurance company's bottom-line.

Additionally, oil changes are a fixed, periodic cost.  Drive the car long enough, and you're going to need an oil change.  Insurance guards us against the unforeseen, like the pickup that is going to T-bone you during your morning commute tomorrow.  Auto insurance uses a number of variables to calculate how much you might cost them one bad day, and uses that to determine how much to charge you and others to prepare for that bad day.  If you're a good driver with a clean driving record, you're less likely to cost the insurance company a shitload of money, so they'll reward your continued business by giving you incentives to keep paying them premiums, such as lower premiums.  On an individual scale, that doesn't make economic sense, but if the insurance company attract ten drivers like you with the lower premium, they make up the cost of your discount in volume.

But oil changes?  Tire rotation?  Those are periodic maintenance tasks.  Doesn't matter how good a driver you are, you're going to need to pay for them.  Does it make sense to have the insurance company essentially act as intermediary with your money, just so they can turn around and give it back you to pay for oil changes and other periodic maintenance costs, or does it make more sense to just pay for this out of your pocket and not give the insurance company a cut for holding your money?