Totaled
Tuesday, May 12 2009
Last week I was involved in a car accident; nobody was seriously hurt, least of all me.
This is a picture of my car. The insurance agency says it’s totaled. They’re going to pay me its “actual cash value” (ACV), which of course isn’t enough to buy me a comparable car. But I can’t afford to fix this one, so totaled it will be. The adjuster tells me that someone will probably buy it at auction, and strip it for parts or try to rebuild it. In a few days, I will sign over the title.
Now this, from the Washington Post:
…[health] insurers said they want Congress to enact legislation that requires every American to have insurance.
During the presidential campaign, Obama opposed such an “individual mandate.” But many Democrats back the concept, comparing it to a requirement that all drivers have auto insurance.
Never mind that no auto insurance policy pays for routine maintenance or wear-and-tear. Even apart from that, auto insurance has something that health care doesn’t: a market for used cars. That’s a big part of why auto insurance works: the adjusters know how much the car is worth, and they can call it “totaled” if the repair costs exceed the ACV. And as a car gets older, that ACV depreciates in a way that is easily quantified. From the point of view of insurers, older cars are cheaper cars.
We don’t know how much a human is worth. There is no market for human bodies (nor should there be), and an older body is a more expensive body. And humans don’t depreciate. So the basic economic facts that make automobile insurance efficient are absent from health insurance; there is no market solution because there is no underlying market. What the insurers want, basically, is a hand-out; they want the government to pay for insurance they won’t sell to sick people.
(article via Margie Burns)
