The Problem with Healthcare, as Seen through Car Insurance

As you know, I got in a car accident last week. And while I meander my way through the process of getting things straightened out and paid for, I’m learning new things all the time. Not about the car accident–but about how this insurance game is played, which seems (to me) to have some implications beyond simple car repair.

So I called my insurance company, and they’ve been a delight to work with so far. Very understanding. They want to get my car repaired as quickly as possible. No complaints here (though I reserve the right to complain if their tune ever changes. If it doesn’t, I’ll gladly give them a shout out by name. But I’m going to wait to heap praises or throw rocks until all is said and done). But in any case, they asked me if I had a place in mind to do the repairs.

“How does it work?” I asked.

And it works thusly: I go to a body shop. They look at the damage and give an estimate on what it’ll take to fix it. They send that estimate to the insurance place, and my insurance company sends me a check for that cost, minus the cost of my deductible. Makes sense, more or less.

So I took Barukki (Yes. We name our cars. In this case, TRC chose the name. Why Barukki? Because at the time he was the world’s biggest Lightning McQueen fan. And in the movie, they’re always talking about “The Rookie” (McQueen) doing this that or the other. But to TRC’s four year old ears, what he heard was “Barukki.” So of course when the opportunity arose to pick a name, he knew just what he wanted.)

Where was I?

Ah yes. Taking Barukki for his health inspection. The body shop (recommended to me by my insurance company, and given their pre-approved stamp of approval) took some pictures, looked at the damage, disappeared to crunch some numbers, and then returned with a total: $3200. (Give or take.) And it’ll take 8 days for repairs to be completed, the duration of which I’ll be given a rental car (that’ll cost extra–but insurance will cover that too, theoretically.)

This is the cost to restore my car to the condition it was in before the accident. And really, it could be $10,000 for all I care. Why? Because I’m not paying it. I’m paying my deductible, and then once that’s come and gone, the end price is “who cares?”

But mind you, this is for a 2007 Honda Civic that now retails in the range of $8000. It still runs perfectly fine. The doors were smashed in, but they both open and close. It looks crummy, but the engine, the wheels, the everything-about-the-car-other-than-the-doors is just fine. And yet someone’s going to pay 40% of the value of the car to return it to a good looking vehicle.

Again, don’t misunderstand me: I’m getting the repairs done. My car is an investment, and the whole point of having insurance is to make sure I can keep that investment in as good of a condition as possible.

However.

If it were me paying the money–if I weren’t insured–would I pay the full $3200 to get the car fixed? Both doors, the fenders that were scratched, the support beam that was dinged? Or would I get it to “good enough” and go from there? Knowing me (and my finances), I’d stop at good enough. But because the people paying for the service (the insurance company) aren’t the people who need the service (me), the price can be pretty much whatever it wants to be.

It’s just like when I broke my elbow. The price I was paying was pretty much arbitrary to me. I’d paid my insurance, and so it was covered. Anything the doctors wanted to have done on me–any tests, procedures, etc–I was up for. Because I wasn’t paying. I looked over the repair estimate on Barukki and shrugged. “Okay,” is pretty much all I said. I didn’t question any of the estimates. Didn’t worry about the necessity of all of them. My insurance company said to go there, I went there, they’d get it fixed. End of story.

I think in order to have prices come down from where they are in health insurance, we somehow need to start connecting the people paying for the services with the people using the services. I have no idea how to do that, which I suppose is the problem: no one does. But as long as there is no connection, that price can be anything people want it to be, and who’s really going to bat an eye, other than the unfortunate who can’t afford health insurance?

That’s very troubling to me. Obamacare “fixes” the problem by saying “Let’s have everyone have insurance.” But it doesn’t address the cost issues, as near as I can tell.

Thoughts?