President Obama and his administration caused quite a stir with their analogy of health insurance and auto insurance. In the administration’s attempt to build a strong case for mandated health insurance, the President and Congressional Democrats are claiming that getting health coverage is as important as getting auto insurance.
During his address to Congress last week, Obama says that the insurance reforms people seek today won’t be achieved unless everyone does their part. One of the reforms being sought after today is the requiring of insurance companies to provide coverage for preexisting conditions. Obama continues that this is the underlying reason behind his appeal to require American citizens to take out basic health insurance packages, the way most states require drivers to take out basic car insurance packages.
Still, this analogy is far from appropriate.
Most states in the US do mandate their drivers to take out insurance. It is also equally true how the Obama administration wants to implement a federal law requiring US citizens to take out health insurance. The similarities between the two types of insurance, however, end there. And the critics of the administration are saying that the President should use a more appropriate analogy to provide justification for this federal mandate that citizens feel is too unprecedented.
Robert Gordon, one of the senior vice presidents of The Property Casualty Insurers Association of America, says there are many inconsistencies in the comparison pointed out by the President.
This mandate in car insurance is easy to avoid. If you do not want to pay for car insurance premiums, then do not drive a car. However, if you do not want to pay for health insurance premiums, then you might as well get ready for the afterlife. As Michael Cannon, the Cato Institute’s director of healthy policy studies says, the only way a person can avoid this health insurance mandate is to divest himself of his own body, which is literally impossible.
Car insurance is actually mandated so that drivers will be the ones to handle liability insurance so that coverage for other people and other cars will be provided. The coverage of the damage done to the driver’s own car is just secondary priority here. Thus, drivers are not really mandated to take out collision insurance. Without collision coverage, a driver can still drive his car even if it has a dented hood. In the context of health insurance, however, even if your car’s body is wrecked resulting from a serious car accident, you still have to be covered here.
In truth, this comparison just does not work, and the Obama administration needs to find a more realistic analogy to work with.