It is a beautiful day. He is driving down a road and picking up a nail in his tire. A few miles later, his tire is going flat, so he stops at the local garage and plugs it in for $10. They suggest that he buy new tires before next winter.

It has been 3 months since your last oil change. Since it’s a nice day, you stop at the Lube Stop and spend $50 on an oil change.

In fact, the day is so nice that you fill up the tank and go for a long walk in the countryside.

On the way back you notice your brake pedal is down, so plan on relining the brakes in the near future before the rotors are damaged, another $75.

What is missing from this equation? He didn’t consider asking his car insurance to cover the expense.

Now what if car insurance was like health insurance?

Imagine new laws requiring all gas stations to file an insurance claim every time you fill up the pump. But good news: you no longer need to pay in advance. Tires, gas, and oil changes are now covered by your car insurance.

Under the new regulations, the gas station has to wait 30 to 60 days to receive payment. Of course, the office worker filing the claim wants your weekly paycheck. The person reviewing the claim also reviews it. The insurance bureau has shipping, utilities, and rent, not to mention they expect to make a profit. Some claims would be denied or lost, so the gas station would naturally charge everyone a little more to cover the losses.

Do you think the price of gas would be higher or lower? Does it really cost more or less to provide the same service?

Suddenly your $800 for gas and maintenance has doubled, or more.

The station owner is angry that he has to hire more help, wait to get paid, and deal with unnecessary hassles.

At least initially, you (the client) are happy, until you get your insurance bill, which has increased by $1,600 to cover the new services.

But by the time you get the bill, you’ll have gotten used to free gas. Hmm, maybe if you drive more it will offset the increased premiums. You’ll get new tires more often, as long as your insurance allows. And, of course, you want the best: no out-of-place brand will do.

This scenario is exactly what happened with health insurance. And so the premiums skyrocket higher and higher. Does any of this make sense to you?

It doesn’t take a genius to see that when everything is “free” the “need” is infinite. Of course, nothing is free, it just looks like it. You are still paying through a third party. And if you already paid, you want the best, AND you don’t want to pay an extra dollar for it.

Of course, your insurance will take your shareholders into account and must make a profit, even if it is against your best interests. Soon only generic oil and imitation tires will be covered, not to mention low-cost gasoline. All this at double the price you used to pay.

Makes you want to go back to the good old days, doesn’t it?

Copyright 2010 Cynthia J. Koelker, MD