Auto Insurance Principles Should Apply To Health Insurance

apart so completely it’s unsalvageable (death) or reaches 200,000 miles (Medicare), regardless of whether she even changes the oil (takes care of herself) in the interim.

As a society, we don’t expect this in private-market auto insurance, but we expect it in private-market health insurance. Furthermore, there’s a chorus of national and state interests, which continuously pushes us further away from the auto insurance principles.

The current private health insurance market isn’t sustainable. Prices have been consistently increasing faster than inflation for decades. Each year, insureds use more health care than ever before and more people have no insurance at all. Most actuaries and other people in the private health insurance market don’t want national health insurance with its bureaucracy and one-size-fits-all benefits. Yet, we’re trying to sustain a private insurance system, which violates the very principles we know are necessary for private insurance markets.

Yes, health insurance involves the sacredness of human life and is therefore different from auto insurance. But if we’re to sustain a private-market solution to health insurance, actuaries need to explain to the larger society, in terms that society understands, the rationale for the following principles:

* As sacred as health care is, it’s still an economic transaction that has to be balanced by individuals and societies, against other economic