Universal Auto Insurance

A few months ago, I was involved in a minor car accident, which was my fault (according to the law). A woman in a huge BMW SUV slammed on her brakes in front of me, and her brakes and large tires were more effective at stopping than my small brakes and bald little tires, and I hit her back bumper. A couple months later, my insurance premium went up. I had no choice but to pay it. The accident stays on my record for several years, and even if I switch insurers I will still pay a higher premium than if I hadn't been involved in the vehicle collision.

Recently scientists announced that they can do a fairly effective prediction of lung cancer risk using a simple urine analysis. Immediately the news outlets cried "FOUL!" at the idea that health insurers might get access to that information and charge high-risk individuals a higher premium.
What's the difference? I see none. My auto insurance company is basically charging me a higher premium for two reasons: 1. to pay for the repair costs to the ding on the bumper of the person I hit 2. Because people who get in accidents tend to get in more accidents, so they are hedging themselves against the fact that I am a higher risk driver than someone without any accidents on their record.

Why do we think this is fair for auto insurers to charge a premium based on risk, but it is unbelievably crass for a health insurer to even propose a similar idea? Why is it okay for an auto insurer to charge a premium based on risk, but illegal (pending Senate vote) for a health insurer to do the exact same thing? I see an obvious double standard here. It seems to me, if you are a smoker, or drink heavily, is overweight, doesn't exercise regularly, has high cholesterol, or a strong family history of a specific kind of cancer, then you are obviously a higher risk client for a health insurance company to cover than someone who lacks the above health-related issues. It seems to me that by not assessing risk in premium rates, health insurance companies then have to charge slightly higher rates across the board to cover the expensive medical costs associated with illnesses that by and large come from the unhealthy.

A woman with a strong family history of breast cancer might find it ridiculous that her health insurance costs are three times as high as a woman with no history of anything, but insurance companies that charged her more might be able to charge healthy women less because they don't need to pad their books as much in case of a likely double mastectomy, chemo, and rehabilitation costs.
Further, it would make sense that after a man has a double bypass because of clogged arteries, his insurance premium would go up. Obviously he is a high risk patient; not only does the insurance company need to recoup its losses that it spent covering his surgery, but his risk of future surgeries and health issues (not to mention the massive medication costs) has gone way up.

Then there is the 700 lb. gorilla in the room, DNA testing. Bioethicists claim that genetic testing could reveal a whole gamut of risk factors for multiple diseases. Patient advocates are quick to proclaim that these tests should be done in the strictest confidence. "If the insurance companies knew the risks, they might raise rates!"

Um, exactly? See this article, where a woman hid her genetic results from her doctor and insurance companies. The condition she was "nearly certain" to get would cost her insurer over $100,000 a year.

What this is boiling down to is that I have been thinking long and hard about the merits of universal free health insurance, current health insurance coverage plans, and Obama's hybrid plan. It seems to me that a major issue with universal health insurance is that we can all forget being healthy, because being unhealthy wouldn't cost us anything.

If your smoking habit cost you another $200/month in health insurance premiums, would you have more incentive to quit? And if after 2 years of not smoking, your insurance premium went down significantly, like auto insurance drops a couple years after an accident if you maintain a clean driving record, would that give you incentive to stay off the cigarettes?

The way I see it, we all need health care coverage in one form or another. But I see no reason why the healthy and the genetically lucky should pay the same montly premiums as the unhealthy and genetically unlucky. It seems to me that if genetic data and full health histories were disclosed to insurance companies, then by and large rates would go down for most, and up for a few.

In the article I linked above, they refer to insurance companies charging higher premiums to higher risk clients as "discrimination". How is it not discrimination that my auto insurer charges me a higher rate?


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