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And what happens if one of your 5 friends is diagnosed with an incurable but expensively treatable illness? Do you kick them out? Do you increase the premiums?

And what happens if one of your 5 friends is diagnosed with an incurable but expensively treatable illness? Do you kick them out? Do you increase the premiums? Do you invite more people in to the pool?

roymurdock 11y ago
It depends on how you design the contract. You might have included a clause where you can release a member from the pool for a high one-time cost from each of the other members. At the end of the day, you would undoubtedly be liable to pay in one form or another for a portion of those treatments, unless the friend felt bad and voluntarily left the insurance group. Insurance among friends would be weird, mixing emotional and purely mathematical calculations.
- mawburn 11y ago
  A single trip to the ER with a serious, but non-life threatening, injury could easily cost more than any 2 members of your group make in an entire year.
  - JoeAltmaier 11y ago
    So its a crap shoot - your small group is very likely to be cheaper, 99% of the time. The only important thing is, can your group actually support a real medical emergency at full cost? That's the only reason to join the group after all. When participating in a larger insurance group, these same costs are born solely by insurance premiums. But the costs are not the same - big insurance companies have negotiated lower prices across the board. Your group cannot. I see p2p insurance as a total loss, because in time of need they cannot possibly pay.
    - ryan-c 11y ago
      From what I'm reading, it sounds like the p2p insurance is intended to cover a portion of the deductible. This would allow the members of the pool to choose higher deductible plans than they would otherwise be comfortable with. If someone develops a chronic illness which is expected to always eat up the pool they would probably be booted after the first year.
      - JoeAltmaier 11y ago
        Whoa - isn't that illegal now? Preexisting condition can't prevent an insurance group from admitting a new member? Or is that restricted somehow?
        ryan-c 11y ago
        I have no idea what the legality of it would be, but it probably wouldn't make sense to accept or keep someone with an expensive-to-treat condition in small pool like that because there may not be enough other members to absorb the cost. The whole point is that everybody has coverage under a high deductible standard insurance plan (which will be significantly cheaper than a low deductible plan), and then the group shares the risk of the deductibles. Best case, everybody pays less for insurance (including what they pay into the p2p pool). Worst case, someone gets sick and busts the pool (and gets kicked out if it's chronic), but everybody still probably paid less overall. Not sure how well this works if the person who got booted can't get their deductible reduced. I think health insurance is weird in a number of ways for this. It'd probably be great for e.g. homeowners insurance.
  - elros 11y ago
    Wow, that's insane! I hope you guys (I'm assuming USA) fix this system soon. In countries with a developed health care system, this sort of thing does not happen.
dpayonk 11y ago
There are many ways to design plans around this nowadays. With Obamacare making health insurance guaranteed issue (they have to cover you), you really would just try to foot the bill for at most 12 months before you could go on a marketplace insurance plan. While it might be gaming the system, it's now law. Nowadays, health insurance is really "assurance" sprinkled in with a doctor subscription (as daniel-cussen mentioned). With that in mind, a hypothetical plan design would collect premiums that bundle reserves, a concierge medicine program, like HealthTap, and critical illness insurance, cancer, and/or accident insurance. These insurances only cover specific incidents for the immediate term. Once someone triggers one of these events, you could push them onto the exchange where the larger risk pool would then cover it on an ongoing basis. Whether or not that would be ethical is up to you... From an economical standpoint, depending on your area's availability (read urban centers), you could likely put together this entire package for a collective and pay the ACA tax for less than an ACA approved plan.

roymurdock 11y ago

It depends on how you design the contract. You might have included a clause where you can release a member from the pool for a high one-time cost from each of the other members. At the end of the day, you would undoubtedly be liable to pay in one form or another for a portion of those treatments, unless the friend felt bad and voluntarily left the insurance group. Insurance among friends would be weird, mixing emotional and purely mathematical calculations.

mawburn 11y ago
A single trip to the ER with a serious, but non-life threatening, injury could easily cost more than any 2 members of your group make in an entire year.
- JoeAltmaier 11y ago
  So its a crap shoot - your small group is very likely to be cheaper, 99% of the time. The only important thing is, can your group actually support a real medical emergency at full cost? That's the only reason to join the group after all. When participating in a larger insurance group, these same costs are born solely by insurance premiums. But the costs are not the same - big insurance companies have negotiated lower prices across the board. Your group cannot. I see p2p insurance as a total loss, because in time of need they cannot possibly pay.
  - ryan-c 11y ago
    From what I'm reading, it sounds like the p2p insurance is intended to cover a portion of the deductible. This would allow the members of the pool to choose higher deductible plans than they would otherwise be comfortable with. If someone develops a chronic illness which is expected to always eat up the pool they would probably be booted after the first year.
    - JoeAltmaier 11y ago
      Whoa - isn't that illegal now? Preexisting condition can't prevent an insurance group from admitting a new member? Or is that restricted somehow?
      - ryan-c 11y ago
        I have no idea what the legality of it would be, but it probably wouldn't make sense to accept or keep someone with an expensive-to-treat condition in small pool like that because there may not be enough other members to absorb the cost. The whole point is that everybody has coverage under a high deductible standard insurance plan (which will be significantly cheaper than a low deductible plan), and then the group shares the risk of the deductibles. Best case, everybody pays less for insurance (including what they pay into the p2p pool). Worst case, someone gets sick and busts the pool (and gets kicked out if it's chronic), but everybody still probably paid less overall. Not sure how well this works if the person who got booted can't get their deductible reduced. I think health insurance is weird in a number of ways for this. It'd probably be great for e.g. homeowners insurance.
- elros 11y ago
  Wow, that's insane! I hope you guys (I'm assuming USA) fix this system soon. In countries with a developed health care system, this sort of thing does not happen.

dpayonk 11y ago

There are many ways to design plans around this nowadays. With Obamacare making health insurance guaranteed issue (they have to cover you), you really would just try to foot the bill for at most 12 months before you could go on a marketplace insurance plan. While it might be gaming the system, it's now law. Nowadays, health insurance is really "assurance" sprinkled in with a doctor subscription (as daniel-cussen mentioned). With that in mind, a hypothetical plan design would collect premiums that bundle reserves, a concierge medicine program, like HealthTap, and critical illness insurance, cancer, and/or accident insurance. These insurances only cover specific incidents for the immediate term. Once someone triggers one of these events, you could push them onto the exchange where the larger risk pool would then cover it on an ongoing basis. Whether or not that would be ethical is up to you... From an economical standpoint, depending on your area's availability (read urban centers), you could likely put together this entire package for a collective and pay the ACA tax for less than an ACA approved plan.