Why can't health insurance be more like auto insurance?

Imagine how much automobile insurance would cost if it paid for all expenses associated with owning an automobile – oil changes, engine failures, worn-out tires, brakes, rust, and so on. The number of people who couldn't afford car insurance would rise dramatically, and we would have a car insurance crisis in America.

That is the situation with healthcare. As health plans increasingly pay for almost every service or procedure, ameliorate our every discomfort, and succumb to every cultural whim and fad, the price of insurance continues to rise.

Health plans are paying for every imaginable benefit – while automobile insurers are not – because of both consumer demand and state mandates.

The demand for additional healthcare benefits is greater than for additional automobile insurance benefits because many people feel entitled to have access to every possible healthcare service. The costs of additional benefits are not always clear to consumers; thus, many people perceive the benefits to be "free." In response to consumer demand, health plans sometimes expand coverage on their own. In other cases, they are forced by politicians running for reelection to cover additional services or procedures.

To make health insurance more affordable, state governments should stop mandating additional benefits and rescind all of their previous mandates. In addition, both private and public insurers (such as Medicare) should agree to pay for only costly and essential medical services and procedures (similar to the way they banded together to pledge to reduce $2 trillion in healthcare expenses a few months ago).

Under the system I am proposing, health insurance would pay for emergencies and urgent care, diagnostic tests and X-rays, medically necessary surgery, hospitalization, therapy, and any other critical services that few people could afford to pay out of their own pockets. Individuals would pay for routine, discretionary, and elective services – such as doctor visits, acupuncture, marriage counseling – on their own.

This type of system – which has not yet been tried – would lower healthcare costs and make insurance more affordable for everyone, especially the uninsured, by reducing the number of healthcare services that are used. When the use of services goes up, health insurers must raise premiums to pay for the increase in expenses. This makes it more expensive for insured people to keep their health coverage, while also making it more expensive for uninsured people to purchase coverage.

Insurance is intended to be a pooling of people's money to pay for large, unexpected expenses – not for every expense that is incurred. In other words, it is supposed to be a safety net for catastrophic events.

Yet many Americans go to the doctor for all kinds of trivial ailments, because their insurance pays for it. True, many people want this type of coverage, but that is because they do not understand the long-term cost implications. If Americans want to keep the current healthcare system sustainable (and it appears they do), then they need to take on more financial responsibility for their healthcare. People who choose to visit the doctor for the sniffles should pay for it themselves rather than making everyone else pay for it. If they did, the use of services – and thus the cost of healthcare – would go down.

If we can budget for our phone, electric, cable, and gas bills, as well as for unexpected household and automobile expenses, then we can budget for routine healthcare services. This would require some families to forgo the purchase of a plasma TV, but it would make health insurance more affordable.

In addition, most health plans even cover lifestyle choices that have been sold as medical conditions by lobbyists, pharmaceutical and medical companies, politicians, the media, and pop culture. Some of these covered services – such as cosmetic procedures, birth-control pills, and abortion – do not even address a diagnosis. (Contrary to popular belief, pregnancy is not a malady.) If there is no medical condition, then health insurance should not be paying for it.

By shouldering a greater burden of their healthcare costs, Americans would probably eat more healthily, exercise more, quit smoking, and lead healthier and happier lives. A healthier population would use fewer medical services, which would lower healthcare costs and premiums.

When it comes to healthcare, we should not confuse luxury with necessity. By transforming health insurance into a system that simply pays for essential medical services and procedures, more Americans would be able to afford insurance – and there would be far fewer uninsured Americans.

Zach Krajacic is a writer in Buffalo, N.Y.