4 ms·

> We don't get auto, life, home or any other insurance from our companies, nor should we, so why do we still do healthcare? Health insurance isn't like auto or

> We don't get auto, life, home or any other insurance from our companies, nor should we, so why do we still do healthcare? Health insurance isn't like auto or home insurance, because it's not purely insurance. Some part of it is, because you're insuring against the risk of rare and catastrophic conditions, but a good chunk of it is covering routine care, which is by definition predictable. Under an insurance model, the insured price of a routine procedure would always be slightly higher than the out-of-pocket (uninsured) price. The phrase "health insurance" is misleading. Real insurance has a negative expected value - you pay slightly more in expectation in exchange for having a lower variance on your possible outcomes. But people don't want that with health "insurance". They want health insurance to cover things that they otherwise wouldn't be able to afford, both routine and catastrophic. That's not insurance, which is why comparing health insurance to any other form of insurance doesn't really make sense.

pjc50 10y ago
> a good chunk of it is covering routine care, which is by definition predictable I'm curious to know what you consider "routine" here? I'm trying to think of what I'd call routine NHS care and the examples I can come up with are childhood vaccinations (not employees), elder care (not employees, medicare in the US), OTC trivia like paracetamol (not exactly covered in either system), and population screening programmes like for breast and other cancers. Then there's chronic conditions such as asthma and diabetes, and the question of whether people who've lost that particular lottery should have a permanently lower standard of living or not.
- ghaff 10y ago
  Most routine care isn't truly predictable other than vaccinations and preventative medicine (physicals, associated lab tests). However, there's a great deal that's statistically predictable but not chronic/catastrophic such as cuts that need stitches, broken bones, bad flu/high fever, etc. that most people will encounter to greater or lesser degrees throughout their lifetime.
- chimeracoder 10y ago
  > Then there's chronic conditions such as asthma and diabetes, and the question of whether people who've lost that particular lottery should have a permanently lower standard of living or not. The whole point is that this isn't an insurance question. It's a question of how someone should pay for a chronic condition that may be more expensive to treat than they can afford, in some cases. But that's not an insurance question, because it's not about smoothing risk across states of the world. So talking about how health insurance should solve problems like these is a misuse of the term "insurance", and comparing health insurance to auto and home insurance is misleading.
- douche 10y ago
  If you have children, it's pretty statistically likely that you'll be in and out of the doctor's office for routine things like ear infections, strep throat, bronchitis, flu. If they play sports, you can tack on sprains, broken bones, x-rays, concussions, and yearly sports physicals. The difference between paying the copays for all those office visits and paying the uninsured-but-not-in-poverty sticker price is massive.
  - pjc50 10y ago
    Is that the adult with the insurance, or the children? This is the point above about "Imagine if all your insurance for your auto, home and life ended when you quit a job" squared: as a child, your health insurance is completely dependent on your parents' jobs.
    - chimeracoder 10y ago
      > "Imagine if all your insurance for your auto, home and life ended when you quit a job" squared: as a child, your health insurance is completely dependent on your parents' jobs. That's not really what happens in the US (and hasn't been for a while). Under the ACA, any involuntary loss of other coverage is a qualifying life event that entitles you to purchase individual or family coverage on the market, just as if it were during the open enrollment period. But even before the ACA, dependents could (and still can be) covered on the old insurance via COBRA for up to 18 months. So nobody's health insurance is really completely dependent on their job (or their parents' jobs). Their ability to afford the coverage they want may be dependent on their income and financial state, but that's already true of auto, home, and life insurance.
  - DanBC 10y ago
    > doctor's office for routine things like ear infections, Why? There's not much doctors can do for ear infection. (Or strep throat, or flu).
    - douche 10y ago
      You know that, and I know that, but a lot of people drag their kids into the doctor's every time they have the sniffles. I guess they don't hand out antibiotics like they used to, but I can remember having strep and getting a prescription for penicillin would knock it out in a day or two, whereas suffering along and letting it run its course could take weeks.
argonaut 10y ago
Except that health insurance is negative expected value. Health insurance companies make tidy profits. And I don't think it's because of negotiating leverage - free consumer choice would do wonders in depressing healthcare prices.
- theli0nheart 10y ago
  Technically, all insurance should have a slight negative EV. What you get in exchange is lower perceived risk.
drawkbox 10y ago
>> Health insurance isn't like auto or home insurance, because it's not purely insurance. True but you still shouldn't get that from the employer, that is part of the pricing problem. >> ...because you're insuring against the risk of rare and catastrophic conditions, but a good chunk of it is covering routine care I'd argue that individual insurance is closer to auto insurance as they have high deductibles and you still do have to pay for routine care mostly out of pocket. Maybe health insurance is changing into more of a catastrophic level like auto/home/life where it really only covers above your deductible, which will be high, so routine health checkups are paid mostly by the customer. Not all companies offer health, dental or vision insurance but people still pay those out of pocket or on individual plans. I'd argue most routine work in most plans today, unless cadillac level, involve the customer paying most of the routine care either as a small part of their premium or at the service as it is below deductible (prescriptions aside, you need insurance to get special backdoor pricing). Health insurance can be massive in cost, much of that is due to the disconnect from reality as it is hooked through companies/employment. I think fixing that will change how people view health insurance and the prices will match market value better, it could also change perception of how to use healthcare. Personally I have never felt that routine care is acceptable to use too much as it harms the group/work policy. So even people that have it are sometimes not feeling like they can use it. When it is independent and personal, if you need it you need it and you can use it without affecting your company group policy, probably paying out of pocket most likely for routine work as your deductible will be high. Why have the added stress of health issues possibly affect your job's insurance group for menial routine work? I've had independent insurance for 5+ years now and that was the first time I actually felt like I could use it even though it paid for little, where the work plans I had I never felt like I could use. Even if you think health insurance is different, it still doesn't mean it should be linked through your job/employer, that causes much of the pricing issues and many other issues associated with employment/survival. It is an ancient way to look at things when people change jobs every 2 years.
- chimeracoder 10y ago
  > True but you still shouldn't get that from the employer, that is part of the pricing problem. I never said that should be the case, but it should also be mentioned you don't need get your insurance from your employer anymore, under the ACA. Employers may provide it as a benefit (just like many other non-cash benefits employers may provide), but nothing's stopping you from purchasing your own insurance separately instead. > I'd argue that individual insurance is closer to auto insurance as they have high deductibles That's only true of HDHPs - you can get PPO or HMO plans instead if you prefer. > Maybe health insurance is changing into more of a catastrophic level like auto/home/life where... routine health checkups are paid mostly by the customer. Yes, that's how health insurance would operate under an actual insurance model. Routine health checkups involve no risk, so there's nothing to insure against[0]. > Personally I have never felt that routine care is acceptable to use too much as it harms the group/work policy. This is a moral hazard problem, and it's part of why it's a bad idea to consider coverage of routine care as "insurance". > [health insurance being] linked through your job/employer... causes much of the pricing issues and many other issues associated with employment/survival. I'll agree that having health insurance being tied to one's employer is bad (though as I mentioned, that's not really the case anymore). Though the pricing issues are more to do with using an insurance model to price something that is fundamentally not about risk, as well as the problems with the way the billing system is setup. I don't think the fact that having health insurance provided by the employer makes a meaningful impact on pricing in the aggregate (as opposed to in individual cases). [0] The fact that you can choose whether or not to have your annual checkup is not 'risk' in the insurance sense; it's an issue of either adverse selection or moral hazard, depending on the point at which it occurs.

pjc50 10y ago

> a good chunk of it is covering routine care, which is by definition predictable I'm curious to know what you consider "routine" here? I'm trying to think of what I'd call routine NHS care and the examples I can come up with are childhood vaccinations (not employees), elder care (not employees, medicare in the US), OTC trivia like paracetamol (not exactly covered in either system), and population screening programmes like for breast and other cancers. Then there's chronic conditions such as asthma and diabetes, and the question of whether people who've lost that particular lottery should have a permanently lower standard of living or not.

ghaff 10y ago
Most routine care isn't truly predictable other than vaccinations and preventative medicine (physicals, associated lab tests). However, there's a great deal that's statistically predictable but not chronic/catastrophic such as cuts that need stitches, broken bones, bad flu/high fever, etc. that most people will encounter to greater or lesser degrees throughout their lifetime.
chimeracoder 10y ago
> Then there's chronic conditions such as asthma and diabetes, and the question of whether people who've lost that particular lottery should have a permanently lower standard of living or not. The whole point is that this isn't an insurance question. It's a question of how someone should pay for a chronic condition that may be more expensive to treat than they can afford, in some cases. But that's not an insurance question, because it's not about smoothing risk across states of the world. So talking about how health insurance should solve problems like these is a misuse of the term "insurance", and comparing health insurance to auto and home insurance is misleading.
douche 10y ago
If you have children, it's pretty statistically likely that you'll be in and out of the doctor's office for routine things like ear infections, strep throat, bronchitis, flu. If they play sports, you can tack on sprains, broken bones, x-rays, concussions, and yearly sports physicals. The difference between paying the copays for all those office visits and paying the uninsured-but-not-in-poverty sticker price is massive.
- pjc50 10y ago
  Is that the adult with the insurance, or the children? This is the point above about "Imagine if all your insurance for your auto, home and life ended when you quit a job" squared: as a child, your health insurance is completely dependent on your parents' jobs.
  - chimeracoder 10y ago
    > "Imagine if all your insurance for your auto, home and life ended when you quit a job" squared: as a child, your health insurance is completely dependent on your parents' jobs. That's not really what happens in the US (and hasn't been for a while). Under the ACA, any involuntary loss of other coverage is a qualifying life event that entitles you to purchase individual or family coverage on the market, just as if it were during the open enrollment period. But even before the ACA, dependents could (and still can be) covered on the old insurance via COBRA for up to 18 months. So nobody's health insurance is really completely dependent on their job (or their parents' jobs). Their ability to afford the coverage they want may be dependent on their income and financial state, but that's already true of auto, home, and life insurance.
- DanBC 10y ago
  > doctor's office for routine things like ear infections, Why? There's not much doctors can do for ear infection. (Or strep throat, or flu).
  - douche 10y ago
    You know that, and I know that, but a lot of people drag their kids into the doctor's every time they have the sniffles. I guess they don't hand out antibiotics like they used to, but I can remember having strep and getting a prescription for penicillin would knock it out in a day or two, whereas suffering along and letting it run its course could take weeks.

argonaut 10y ago

Except that health insurance is negative expected value. Health insurance companies make tidy profits. And I don't think it's because of negotiating leverage - free consumer choice would do wonders in depressing healthcare prices.

theli0nheart 10y ago
Technically, all insurance should have a slight negative EV. What you get in exchange is lower perceived risk.

drawkbox 10y ago

>> Health insurance isn't like auto or home insurance, because it's not purely insurance. True but you still shouldn't get that from the employer, that is part of the pricing problem. >> ...because you're insuring against the risk of rare and catastrophic conditions, but a good chunk of it is covering routine care I'd argue that individual insurance is closer to auto insurance as they have high deductibles and you still do have to pay for routine care mostly out of pocket. Maybe health insurance is changing into more of a catastrophic level like auto/home/life where it really only covers above your deductible, which will be high, so routine health checkups are paid mostly by the customer. Not all companies offer health, dental or vision insurance but people still pay those out of pocket or on individual plans. I'd argue most routine work in most plans today, unless cadillac level, involve the customer paying most of the routine care either as a small part of their premium or at the service as it is below deductible (prescriptions aside, you need insurance to get special backdoor pricing). Health insurance can be massive in cost, much of that is due to the disconnect from reality as it is hooked through companies/employment. I think fixing that will change how people view health insurance and the prices will match market value better, it could also change perception of how to use healthcare. Personally I have never felt that routine care is acceptable to use too much as it harms the group/work policy. So even people that have it are sometimes not feeling like they can use it. When it is independent and personal, if you need it you need it and you can use it without affecting your company group policy, probably paying out of pocket most likely for routine work as your deductible will be high. Why have the added stress of health issues possibly affect your job's insurance group for menial routine work? I've had independent insurance for 5+ years now and that was the first time I actually felt like I could use it even though it paid for little, where the work plans I had I never felt like I could use. Even if you think health insurance is different, it still doesn't mean it should be linked through your job/employer, that causes much of the pricing issues and many other issues associated with employment/survival. It is an ancient way to look at things when people change jobs every 2 years.

chimeracoder 10y ago
> True but you still shouldn't get that from the employer, that is part of the pricing problem. I never said that should be the case, but it should also be mentioned you don't need get your insurance from your employer anymore, under the ACA. Employers may provide it as a benefit (just like many other non-cash benefits employers may provide), but nothing's stopping you from purchasing your own insurance separately instead. > I'd argue that individual insurance is closer to auto insurance as they have high deductibles That's only true of HDHPs - you can get PPO or HMO plans instead if you prefer. > Maybe health insurance is changing into more of a catastrophic level like auto/home/life where... routine health checkups are paid mostly by the customer. Yes, that's how health insurance would operate under an actual insurance model. Routine health checkups involve no risk, so there's nothing to insure against[0]. > Personally I have never felt that routine care is acceptable to use too much as it harms the group/work policy. This is a moral hazard problem, and it's part of why it's a bad idea to consider coverage of routine care as "insurance". > [health insurance being] linked through your job/employer... causes much of the pricing issues and many other issues associated with employment/survival. I'll agree that having health insurance being tied to one's employer is bad (though as I mentioned, that's not really the case anymore). Though the pricing issues are more to do with using an insurance model to price something that is fundamentally not about risk, as well as the problems with the way the billing system is setup. I don't think the fact that having health insurance provided by the employer makes a meaningful impact on pricing in the aggregate (as opposed to in individual cases). [0] The fact that you can choose whether or not to have your annual checkup is not 'risk' in the insurance sense; it's an issue of either adverse selection or moral hazard, depending on the point at which it occurs.