In the text we discuss the U.S. healthcare system as a \"third-party payer\" sys
ID: 1222332 • Letter: I
Question
In the text we discuss the U.S. healthcare system as a "third-party payer" system: When you receive healthcare in the U.S. generally you are not paying for it; you are paying for insurance, and your insurance pays for the healthcare. Hence, the payment is being made by a third party, your insurance company. The result is: People purchase more "healthcare" than they would if they were paying for it themselves.
Your discussion question is this: What I just described could also apply to auto insurance! Most people have car insurance, and when they get in an accident it's the insurance company paying to repair their car; the money is not coming out of the driver's pocket (any more than the money for medicine is coming out of the patient's pocket). But in the market for auto repairs we do not see a situation where people "purchase" more repairs than they would if they had to pay for it themselves! Why not? Auto insurance is also a third-party payer system. What's different about car insurance?
Explanation / Answer
We know that the third party insurance means that a policy that protects agianst the actions of another party. The important types of third party insurance is auto mobile insurance. Under this the insurance coverage against the claims of damages or losses incured by a driver who is not the insured.
The third party car insurance is the policy of when we have met an accident, then we file third party claim against the driver's car insurance for the payments of our medical bills and other damages.
In the thirrd party system of insurance the part will pay most of the cost of health care services. In the health care insurance cover routine health care as well as catastropic health care. But in the case of auto insurance it covers only unfreseen events. It cannot make the cost of routine maintanance or cost of driving of a car.