I heard a fascinating discussion on healthcare and insurance this morning. I tend to be somewhat of a conservative talk radio junkie. The cat’s out of the bag! I admit it and, quite frankly, I’m okay with that.
The guest of the show today had some great things to say. I will do my best to paraphrase what he said.
“We pay for car insurance in case our vehicle is involved in a crash. We pay home insurance in case a tree limb falls on our house. However, we expect our health insurance to cover everything.”
His point today is that our auto insurance does not pay to fill our car with gas or pay for oil changes. Our homeowner’s insurance does not pay for painting our house or regular maintenance on our house. Yet, with our health insurance, we often expect all of these things to be taken care of.
I used to think this way. Well, that is until I became an economist!
Okay, so I am not really an economist.
I have a degree in economics. That really doesn’t mean a lot and certainly does not make me an economist, but I did learn a few practical things. One is that insurance was designed for people who are risk averse. It is a way for us to make a purchase or to do something we would not ordinarily do. At least, not without some form of protection in case something goes wrong. Sometimes insurance is our choice. Other times we are required by law, be it state or federal, to have insurance. Some people choose to have minimal or no coverage insurance coverage because they believe they have enough money set-aside for the “what if” possibilities in life.
Here’s my point. Healthcare does not equal health insurance.
Insurance is not perfect and health care costs are crazy. But, I for one am very happy that we have the option to have insurance coverage. That is, until I have enough cash stashed away for all the “what-ifs” in my life. Maybe I’ll plant a money tree!
Here is a great explanation of insurance: http://en.wikipedia.org/wiki/Insurance