How would you feel about paying for your car insurance by the mile? According to the Massachusetts Insurance Agents Association, the Patrick administration is preparing to roll out a pilot program to see if it could work here. It’s all part of Deval Patrick’s obsession with global warming:
On December 29, 2010, Secretary of Energy and Environmental Affairs Ian Cooper presented a report to the Legislature on the proposed Clean Energy and Climate Plan for 2020 which was prompted by the passage of the Global Warming Solutions Act (MGL c. 210). The plan’s purpose is to achieve a statewide greenhouse gas emissions limit which is 10 to 25 percent below the 1990 emissions level.
Included among the steps to achieve the reductions in greenhouse emissions is a pilot Pay As You Drive (PAYD) insurance program. According to the report, ―PAYD would convert a large fixed annual premium into a variable cost based on miles traveled, creating a major incentive to reduce discretionary driving, while cutting the overall cost of insurance due to fewer accidents
The article, unfortunately, is not available online (unless you’re an MAIA member), but what’s fascinating is how its supporters are pushing PAYD for being more fair. It connects your behavior—how much you drive and where you drive—to your costs.
Under strictly per mile pricing, we estimate an average premium of 8.2¢ per mile statewide, ranging from 4.3¢ for the lowest‐risk customers to 37¢ for the highest‐risk customers.
Sure! Terrific! The more expensive I am likely to be, the more I have to pay for my car insurance. Setting aside the privacy issues of how my government tracks my movements and mileage—it’s great! You go, Gov!
Gov. Patrick is pushing for a new health care payment system where doctors would not be allowed to charge per visit or per treatment, but instead would get a single lump sum for each patient in his practice. Your doctor would get paid the same amount for treating you if he never saw you, or if you were there every week.
In other words, it’s the complete opposition of PAYD. A complete disconnect between how risky/costly you are as a patient, and what you cost.
At least one of these ideas is incredibly stupid. (hint: it’s the one we already tried in Massachusetts and which failed miserably). But how can any rational person support them BOTH? Either “one-size-fits-all” makes sense, or “pay-as-you-go” is the right idea. But how can it possibly be both?
Gov. Patrick knows capitation won’t work, by the way. He’s just desperate to make it look like health care costs aren’t skyrocketing here in the home of ObamaCare 1.0. Every day our soaring insurance premiums and climbing medical costs prove what critics of ObamaCare have said all along.