Health insurance should not be designed to cover routine or trivial medical costs. Only major or catastrophic costs.
Around fifteen years ago, I was sitting in a car insurance office and had a long chat with the lady....I wanted lower rates. So the lady finally suggested...a huge deductible. At the time, I think I had at $300. I ended up having it set at $1,500 (it was a fairly new car, I admit). Rates drastically went down.
I would not suggest this strategy with a car which is five or six years old.
I would be curious to know what the yearly health insurance would be....if my deductible was around $10,000.
A lot of people in positions of power have NO constitutional authority to meddle in healthcare and healthcare insurance in the first place.
I agree, but you’ll never convince most people. For the typical user of insurance provided by an employer, he neither knows nor cares what it costs per month, and the value is entirely in how little he has to pay at the point of service for any healthcare transaction.
The American public needs to be weaned off the $10 co-pay. HMO’s have ruined the health industry. Doctor visits for minor stuff should be out of pocket.
I don’t understand why this is even a question.
An insurance company, ANY insurance company agrees to take on risk. In exchange, they require the payment of premiums. The premise of the ins co, just like ANY business that wants to stay in business, is that its collections must outweigh its payouts and its various admin expenses, eg; salaries, rents on premises, coffee in the break room, etc; etc; If and when the ins co has to pay a claim, they pay in, wait for it....MONEY. They do not replace your liver or your teeth or your eyes.
From their long experience and extensive statistical studies, what they charge for a policy is whatever their perception of risk plus a profit. In prior years, they have been able to invest excess premia that do not have to be paid out and earn interest coupon returns. That opportunity is diminished in recent years, of course.
Suppose 10 friends came to you and wished to buy an insurance policy against any or all of them getting a $100 speeding ticket during the next year? What should you charge them?
Well, maybe you would look at their driving records, maybe you would study what the general rate of getting speeding tickets is. Perhaps you come to the conclusion that 3.5 of them will get such tickets. So that means that you expect to pay out $350. If nobody gets a ticket or only one does, you get to keep some premium and build up your reserves. If 8 of them get speeding tickets, you goofed. At any rate, you figure that you had better collect maybe enough to pay for 5.75 tickets. The price of each such policy is thus $57.50. If that isn’t worth it, the 10 friends don’t buy it. If you have to pay out nearly $60 to avoid having to pay out $100 that scarcely seems worth it.
But if the ins co decides to insure against only $50 of speeding ticket fines, then they could cut the policy premium in half.
If the arrangement reduces the risk to the ins co, they can sell policies cheaper.
The ever-expanding notion of including every possible medical procedure in an “infinite coverage” regime is what drives up insurance costs.
So perhaps health insurance needs to become more like auto insurance. With auto insurance you choose coverage like Collision, Comprehensive and liability. You choose the coverage limits and deductibles.
Health insurance gets renamed to “prepaid Health care” and that premium in effect prepays for routine care. With no deductible - once you exhaust what is prepaid the rest is on you. Your premium is based on your general health and occupation.
Then you select the level of coverage you want for “catastrophic” care - perhaps you pick up to half million dollars with no deductible. Once you have exhausted your coverage the rest is on you. Just like prepaid your premium is based on general health and occupation.
You could layer on Prescription prepayment too.
No preexisting exclusions should be permitted.
The problem today is the deductible. If someone is forced to buy insurance they purchase the cheapest they can get with the highest deductible. Then they get sick and go to the ER and ignore the bill which gets supplemented by everyone who actually pay their bills. There needs to be a method by which people are FORCED to pay for the care they receive so everyone else isn’t covering their failure to pay. If someone could not afford insurance before Obamacare by what measure did the Government think they could afford to pay both a premium AND a deductible? Makes no sense.
Alternatively just pass a bill that every employer must provide some basic level of coverage to every employee - no matter full or part time. Every employee is covered as is their family. Now every employer would raise their prices to cover this additional cost. Each employee would be responsible for some percentage of the premium - say 15%.
As an employer I offered health insurance to each employee. They all paid 15% of the premium. I bought a 2K deductible plan that was quite comprehensive. I paid the deductible for each employee so it kept my premium down. I saved even with paying the deductible.
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That is absolutely the truth. All you have to do to demonstrate that lack of understanding is to make mention of "preexisting conditions".
When the fool starts babbeling nonsense, ask them if they thought they should be able to total their car while they are uninsured, and then buy a policy and have the insurance company be on the hook for repairing it.
I object to hearing that my premium is going to double AND that my deductible is going up into the stratosphere. That happened 3 years in a row. I was paying more and more and getting no benefits.
The problem with any healthcare plan that contains provisions that guarantee losses (such as coverage for preexisting conditions and pregnancy) is that the premiums have to be so high as to make the plan unattractive to the age group that had to join in to make the systematic losses viable.
Young people stayed away in droves because they saw no advantage to them in paying thousands of dollars for insurance while they were healthy. And by letting 18-26 y.o. stay on their parent;s insurance, at the cost of a child’s insurance, Obamacare compounded the problem by removing them from the potential enrollment pool.
I sold health insurance policies for years and the mistake that professors and politicians are making is that you can attract young policyholders to ANY plan that involves them making voluntary enrollment. The only insurance that most young folks want is pregnancy insurance—after they have decided to have a baby or already have one on the way.