Government Health Insurance? What About Public Auto Insurance
Having lived in both the United States and Canada, I have been watching the ongoing debate over a public health option in America with amazement at the level of disinformation that is freely flowing. For one thing, there are claims that Canada has a vast national bureaucracy running the health system.
As a consumer of Canadian medical care, I can say that based on my firsthand experience that these claims are contradicted by the facts. There is no big medical bureaucracy in Canada, in fact there is no "Canadian" universal health plan. In reality, each province has its own unique public healthcare system. While it is true that every Canadian is covered by some form of universal medical insurance, there are variations in the level of medical services made available without charge, based on how much tax revenue the citizens of each province are prepared to allocate for healthcare. However, even the least wealthy provinces ensure that all basic and essential medical services are covered by their plans. In my experience, the quality of Canadian doctors and nurses is in no way inferior to what I encountered in the United States. Also, contrary to what is being argued by the opponents of a public healthcare system in the United States, at no time has any government bureaucrat, or for that matter private insurance company bureaucrat, stood between me and my doctor while living in Canada. Independent studies on the relative costs of medical care in both the U.S. and Canada clearly demonstrate that far less money is spent by Canadians on administration and bureaucracy in the delivery of medical services.
It seems that the core argument offered by the opponents of a public health option in the United States is based on the premise that government is inherently inefficient and costly, while the private sector is always frugal and efficient. I offer an alternative perspective on this claim, based not on healthcare, but automobile insurance. Let us look at the experience of a western Canadian province, Manitoba.
At one time Manitoba had the highest rate of auto theft in the country. Not surprisingly, this led to onerous car insurance premiums, which were unaffordable for many motorists. When the New Democrat Party took control of the provincial government, they made it a priority to resolve the problem of excessive car insurance premiums. Their solution was a novel and radical one; the NDP government abolished all private auto insurance companies, and replaced them with what in Canada is referred to as a crown corporation, Manitoba Public Insurance, wholly owned by the provincial government.
I am sure many Americans would react to what I have just written by assuming that this was another government boondoggle, and that the only way Manitoba could reduce auto insurance premiums through a public company would be with subsidies from the taxpayers, essentially robbing Peter to pay Paul. And they would be wrong.
This is what actually happened in Manitoba. The public insurance company was set up as an exceptionally well managed enterprise. Because it was part of the provincial government, it could work directly with law enforcement and the criminal justice system to confront the problem of auto theft. One of the measures adopted by Manitoba Public Insurance was to provide free installation of immobilizers for high risk autos, resulting in a dramatic drop in payments for stolen cars. In fact, Manitoba Public Insurance is so efficient, it now probably has the lowest rate of auto insurance premiums in North America. Rather than being subsidized by the taxpayers, MPI is a cash cow, and even frequently provides annual rebates on already low premiums to its policyholders.
What is also impressive with MPI is its partnership with small entrepreneurs, namely insurance agents. The crown corporation maintains no vast bureaucracy. A motorist simply purchases his public auto insurance policy from the same insurance agent where he or she buys the household insurance. Furthermore, the government recognized that it could save a lot of money by having the same insurance brokers also take over the role of issuing drivers permits and auto license plates. Rather than stand in line at a DMV facility as I often did in the United States, you simply drop by your insurance agent's office once a year, pay your annual insurance premium, and simultaneously take care of your car registration and license renewal in one quick visit, with no hassles or long lines to suffer through. If you need your photo ID updated, the provincial government has furnished your neighborhood insurance agency with a digital camera, for just that purpose.
The Manitoba Public Insurance concept is a triumph of reason over ideology. In effect, an expensive large company monopoly has been replaced by a partnership involving both the provincial government and small business, the result being the provision of an essential public service with substantially lower costs and higher efficiency. This program has had important economic benefits, especially at a time of global financial and economic crisis. Low auto insurance rates contribute to an overall lower cost of living. Cost competitiveness has enabled Manitoba's economy to function well, with relatively low unemployment, even in the wake of the global economic crisis.
Looking towards the United States, such a creative alliance of government and small business would never be considered as an alternative to the expensive corporate insurance model that currently exists. It is a tragedy for the American people that ideology and propaganda will squash any consideration of a well-executed public insurance option, no matter how compelling the case may be.
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Car accidents are a billion dollar industry because car accidents make people spend money. Bad drivers cause car accidents and cheap public auto insurance allows them to be on the road.
Ask yourself why provinces with public auto insurance have more car accidents and more deaths. The Fraser Institute of Canada
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If you want to stimulate your state's economy (the academic's way of saying make people spend money) you need cheap public auto insurance with no injury benefits and lawsuit protection for the at fault driver, just like MPI. Every idiot who shouldnt be on the road will be on the road causing car accidents. In other words stimulating the economy.
I am not suggesting that private insurance is better. Manitoba Public Insurance is a perfect example of a good idea gone bad. Public auto insurance is great as long as you dont hand it out freely and take away all injury benefits.
Horror stories like this are all too common in MB because these idiots are legally on the road.
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Victims of MPI
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Manitoba Public Insurance is a joke
There is a simple reason why MPI is such a cash cow; MPI doesnt pay for anything. MPI is an insurance monopoly with impunity. They have absolute power to end any claim based on anything and they can not be sued.
Mpic Act Sec 199 - http://web
It's not a good thing that any drunken hillbilly with a golf cart can buy insurance and be legally on the road. Add insult to injury, the same hillbilly cannot be sued for destroying your life.
MPIC Act Sec 72 - http://web
Cheap public auto insurance subsidizes bad drivers by punishing good drivers with reduced benefits.
Try making an injury claim and spending 14 years of your life dealing with an impaired driver hiding behind MPIC Act Sec 72 and an Insurance Monopoly specializing in Bad Faith Insurance which cannot be sued. MPIC Act Sec 199
Manitoba's chief justice has recently deemed MPI as "Wholly Inadequate".
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Might I suggest that you talk to actual injury claimants before telling America how great MPI is because Manitoba Public Insurance is a joke on a fair and just society.
Victims of Manitoba Public Insurance
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Good article. My province of BC also has provincial insurance: ICBC (Insurance Corp of BC). I remember auto insurance before ICBC was instituted: higher prices and no uniformity, you had to shop around for the cheapest rates. The local insurance broker still sells the policy, the only difference being the cheque is made out to ICBC and not them. I don't know the way it works, but I guess the broker gets a commission on every ICBC policy sold.
It works. No one wants to go back to the way it used to be.
There used to be a time where it was "legal" to drive a car without insurance as no proof was required. (bad) Then laws were written and enacted mandating insurance and proof to register a car. (good) One idea mentioned by many at the time - I was living in Oregon - was that simply adding a nickel to the fuel tax would have been enough for the state to cover all licensed drivers with basic liability coverage. The idea was that if government requires it, they ought to provide a way or option to comply with the requirement. Comprehensive coverage was not included. Unfortunately the idea did not get a hold, as it would have eliminated a lot of running around and would have guaranteed basic coverage. I would to this day support this idea, as an added tax to our fuel tax would charge those most on the road proportionally more than the occasional driver. Not having to fork over money to for profit insurance companies would tickle me pink, considering the way the bums are treating their customers of medical insurance. Any leftovers could be used to either adjust the per gallon fee down or use the leftover for safety improvements or maintenance of the roads.
Thank you for a great article. Your statement that "ideology and propaganda will squash any consideration of a well-executed public insurance option, no matter how compelling the case may be" may prove true indeed. As long as that propaganda consists wholly of lies that are gobbled up by those who are just looking for a reason to cower in fear, we will have a mighty struggle.
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