One of the scintillating observations to come out of a health insurance panel discussion this week is that health insurance, when divided into four basic components, is only really insurance in one of the four instances.

Elements commonly included in health insurance are actually four separate financial tools, only one of which is insurance in the classic sense and that is coverage for catastrophic health events such as serious illness or a car accident. The other three areas of coverage – for preventive services, routine treatment and chronic care – are not insurance because they are used for predictable expenses.

Finding a way for more people to afford the current system at the current price is a very different question from, “How can we make the underlying asset more affordable?`” according to Mark Smith, president and CEO of the California HealthCare Foundation, “Dickering around with insurance won’t solve the underlying problem.”

“The thing we call `insurance` is actually four products put together in one financial instrument which is increasingly unaffordable,” he said. “If the cost of new tires is included in your auto insurance, that radically distorts the cost of your auto insurance.”

What Americans think of as ‘basic’ health-insurance coverage is not such a basic question. Expectations about what health insurance is expected to do, and its decreasing ability to those things, is a major contributor to our health care dysfunction. In many cases, people are paying for things they may not need or could get elsewhere.

For low-income individuals, protecting assets they do not have is not much of a priority, Smith suggested. However, lowering the cost of a mammogram from $800 to $150 could dramatically improve health outcomes.

To cover predictable healthcare needs, society could experiment with group preventive care funds and other financial tools, thus lowering the cost of health coverage at the same time. “We should expand insurance coverage, but think about what insurance really does. Is there a different way to do the things insurance does for you?”