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Dental insurance in the US is a bad example, because they generally pay for (in a year) 2 routine cleanings, silver fillings, and a percent of anything else, up

Dental insurance in the US is a bad example, because they generally pay for (in a year) 2 routine cleanings, silver fillings, and a percent of anything else, up to some ridiculously small maximum of $2k or something. You very much can get price quotes for dentistry.

ams6110 9y ago
And really, they should NOT be paying for 2 routine cleanings, because those costs are both modest and predictable and that's not the point of insurance. The reason they do pay for the cleanings is that it's probably cheaper than paying for the increased fillings and root canals that they would incur if people skipped the routine cleanings. So they want to incentivize that, even though it's not really the sort of unexpected ruinous expense risk that insurance is really meant to assume. They could achieve the same goal by providing a discounted premium with proof of routine cleanings, but that's probably more complicated for both them and their customers.
- chimeracoder 9y ago
  > The reason they do pay for the cleanings is that it's probably cheaper than paying for the increased fillings and root canals that they would incur if people skipped the routine cleanings. Actually, no, they reason they do is because they're usually subsidized by employers providing the plans. In other words, it'd be equivalent to the employer reimbursing a portion of your regular dental care that you pay for out-of-pocket. The expected reduction in cost for the insurer due to routine cleanings is negligible from their perspective. If you purchase dental insurance individually, these treatments are very rarely covered, or if they are, the price under insurance is usually about the same as the price without insurance. Which makes sense from a risk model - when there is literally no risk at hand, the price under insurance should actually be higher than the uninsured price, by a tiny amount.
- rlucas 9y ago
  This is a great example of why most "health insurance" (or dental or vision "insurance") isn't really insurance. It's a bundled prepayment model, similar to selling gift certificates/cards or the like. Basically making money on breakage / float. Real casualty insurance wants to reduce the number/magnitude of casualty losses. So the theft insurer wants you to get good locks and an alarm, the fire insurer wants you to get sprinklers, and they all want nice orderly public services with good response times and suitable building codes. Win-win-win. Nobody would ever be unhappy if they paid their whole life for fire insurance and their house never burned down. But health "insurance" can't really reduce the amount they pay out (the "medical losses") because the customer is expecting to consume healthcare. It's also more complicated because one of the best ways to reduce medium term healthcare costs is to spend more on short term healthcare costs. Can you imagine if the best way to prevent a house fire was to have a little house fire every year? (Well, that's not so crazy in terms of wildfires, perhaps.) Then, there's the fact that in the very long term, everyone will die and many will get really sick just before that. And the private health "insurance" companies do their damnedest to avoid that group entirely, having effectively shunted them all off onto the commonwealth (Medicare). Health insurance is not like other insurance and we need a new word for what it really is.
  - deleted 9y ago
    [deleted]
  - Johnny555 9y ago
    It's a bundled prepayment model, similar to selling gift certificates/cards or the like. Basically making money on breakage / float. It's not just prepayment, but also a negotiated price that's lower than the average person can negotiate themselves.

ams6110 9y ago

And really, they should NOT be paying for 2 routine cleanings, because those costs are both modest and predictable and that's not the point of insurance. The reason they do pay for the cleanings is that it's probably cheaper than paying for the increased fillings and root canals that they would incur if people skipped the routine cleanings. So they want to incentivize that, even though it's not really the sort of unexpected ruinous expense risk that insurance is really meant to assume. They could achieve the same goal by providing a discounted premium with proof of routine cleanings, but that's probably more complicated for both them and their customers.

chimeracoder 9y ago
> The reason they do pay for the cleanings is that it's probably cheaper than paying for the increased fillings and root canals that they would incur if people skipped the routine cleanings. Actually, no, they reason they do is because they're usually subsidized by employers providing the plans. In other words, it'd be equivalent to the employer reimbursing a portion of your regular dental care that you pay for out-of-pocket. The expected reduction in cost for the insurer due to routine cleanings is negligible from their perspective. If you purchase dental insurance individually, these treatments are very rarely covered, or if they are, the price under insurance is usually about the same as the price without insurance. Which makes sense from a risk model - when there is literally no risk at hand, the price under insurance should actually be higher than the uninsured price, by a tiny amount.
rlucas 9y ago
This is a great example of why most "health insurance" (or dental or vision "insurance") isn't really insurance. It's a bundled prepayment model, similar to selling gift certificates/cards or the like. Basically making money on breakage / float. Real casualty insurance wants to reduce the number/magnitude of casualty losses. So the theft insurer wants you to get good locks and an alarm, the fire insurer wants you to get sprinklers, and they all want nice orderly public services with good response times and suitable building codes. Win-win-win. Nobody would ever be unhappy if they paid their whole life for fire insurance and their house never burned down. But health "insurance" can't really reduce the amount they pay out (the "medical losses") because the customer is expecting to consume healthcare. It's also more complicated because one of the best ways to reduce medium term healthcare costs is to spend more on short term healthcare costs. Can you imagine if the best way to prevent a house fire was to have a little house fire every year? (Well, that's not so crazy in terms of wildfires, perhaps.) Then, there's the fact that in the very long term, everyone will die and many will get really sick just before that. And the private health "insurance" companies do their damnedest to avoid that group entirely, having effectively shunted them all off onto the commonwealth (Medicare). Health insurance is not like other insurance and we need a new word for what it really is.
- deleted 9y ago
  [deleted]
- Johnny555 9y ago
  It's a bundled prepayment model, similar to selling gift certificates/cards or the like. Basically making money on breakage / float. It's not just prepayment, but also a negotiated price that's lower than the average person can negotiate themselves.