6 ms·

And an insurance should be, well, an insurance. What is referred as "health insurance" is more like "health care plans" (insurers even call it "plans"). Just co

And an insurance should be, well, an insurance. What is referred as "health insurance" is more like "health care plans" (insurers even call it "plans"). Just consider how comprehensive auto insurance is different from health insurance in practice.

lotsofpulp 6y ago
Overall health is not insurable. It’s a misnomer. There is a 100% chance of everyone needing healthcare in the future. US health insurance does a few things: 1) premiums partially serve as a tax to transfer wealth from young and healthy to old an sick 2) insurers healthcare recipient from the big costs (over out of pocket maximum - $7k to $13k per year), subject to in network providers 3) Negotiates pricing and determine appropriate level of healthcare, I.e. acts as informed agent for uninformed buyers The last one is controversial, but it’s funny since people complain about high insurance premiums and then also complain about insurance companies denying what might be frivolous charges by healthcare providers.
- valenterry 6y ago
  > There is a 100% chance of everyone needing healthcare in the future. 1) that's not true. One can die in an accident and not cause an future healthcare costs. 2) health care costs are of course insurable, why not? Just because everyone will create costs with a high chance does not mean that everyone will always create the same costs. The insurance is there for when you have some illness that causes more costs than you could afford.
  - lotsofpulp 6y ago
    I didn't feel like writing 99.9999% chance at the time, so I rounded up to 100%. It's not insurable in the sense that at some point, the losses are so large and so frequent, that the insurer needs to collect premiums from almost everyone in order to cover the costs. At that point, the premiums start to resemble a tax. I actually do consider the premiums a tax for the following reasons: 1) there is a mandate to purchase health insurance (although now neutered in most states due to removal of federal tax penalty) 2) the maximum premium is set to 3x the lowest premium (means young people subsidize old people) 3) premiums can only vary based on age and tobacco use 4) there is an annual in network out of pocket maximum Another example of an uninsurable risk is insuring homes on the Florida and other Gulf states coastline for flooding. No private insurer would touch this market since the losses are so high, so the government created the National Flood Insurance Program, which is the federal taxpayers taking on the liability for flood damage for those homes.
    - valenterry 6y ago
      > It's not insurable in the sense that at some point, the losses are so large and so frequent, that the insurer needs to collect premiums from almost everyone in order to cover the costs. I actually do consider the premiums a tax for the following reasons Could it be that you limit your perspective onto only the US at the current point in time? Otherwise what you say just doesn't make any sense and your points can't be generalized. And even in the US, health insurance is not mandatory (as you say yourself), hence I would still not call it a tax. > No private insurer would touch this market since the losses are so high, so the government created the National Flood Insurance Program, which is the federal taxpayers taking on the liability for flood damage for those homes. Yeah, so if you don't talk about flooding being insurable in general but that there just isn't any company that is doing it for Florida then I agree. And to be honest, I think it's not good that the taxpayers are paying here. The nice thing about insurance is that it gives incentives, such as "don't live somewhere if you can't afford the dangers at this place".
      - lotsofpulp 6y ago
        >Could it be that you limit your perspective onto only the US at the current point in time? Otherwise what you say just doesn't make any sense and your points can't be generalized. And even in the US, health insurance is not mandatory (as you say yourself), hence I would still not call it a tax. What I mean by insurable and uninsurable is that an entity can come in and sell insurance which can benefit the buyer alone, and is not an explicit subsidy to the other insureds in the risk pool. However, for health, it's a no brainer to opt out of health insurance between ages 20 and 40 (maybe not if you're a woman that's going to have kids). This makes the risk pool completely full of people experiencing losses and that point, it's just a cost sharing arrangement. I.e. Auto insurance premiums reflect the loss the insurance company will experience from your driving. Home insurance premiums reflect the loss the insurance company will experience from damage to your home. Life insurance will reflect the loss the insurance company will experience from your death. But health insurance (as implemented in the US) premiums explicitly reflect the loss the insurance companies experience from older, sicker people due to the various stipulations I listed in my posts above. >And to be honest, I think it's not good that the taxpayers are paying here. The nice thing about insurance is that it gives incentives, such as "don't live somewhere if you can't afford the dangers at this place". I agree, and that's why I don't like using the word insurance when it's not really insurance in the conventional sense. It's a tax, which I'm not opposed to, but I think there is value in recognizing that health insurance premiums are explicitly going to pay for healthcare for other people. This manifests itself every time someone complains about ACA causing health insurance premiums to increase, as if the law or insurers caused the premiums to go up. What really happened is the law allowed more healthcare to be provided to more people, and the way it funded it was by increasing health insurance premiums and having everyone pay (i.e. the mandate to purchase health insurance), and I think we'd be better off if we referred to this as a tax and recognize that the increase in insurance premiums is going towards benefiting others by giving them access to previously inaccessible healthcare.
- hippich 6y ago
  I believe you mean "overall health" as in a continuum of the living being life health. What I mean by insurance is a contract that specifies what risks can be insurance, up to what limit and how much it will cost. You unlikely to have problems to insure a new car bought off the dealer lot. You will likely have problems insuring a very old car, with missing brakes and flat tires. Similarly, health insurance is quite possible for healthy folks in their 20ies-40ies (maybe? just an example of the age range). And, like you said, insurance payout becomes likely certain and potentially unlimited if you try to insure someone who is 90 old. All that doesn't mean that health insurance can not exists as a thing. It just means that insurance is a tool that applicable to a specific scenarios and not a blanket solution for health care. And what discussions happens in the US, somehow it is either health insurance takes care of everything, or it is government takes care of everything. I think there is a place for both tools (and perhaps even more others i can't think of right now). EDIT: another thing that bothers me about health insurances in the USA - it is expected that insurance is involved in every single case of working with health care providers. I do not think annual flu shots is a risk that needs to be insured (it is known, and can be planned upfront for). Similarly, a visit to the family practice with a cold or ear infection does not need to be insured. Bringing back car example - it would be like bundling annual oil change, or a flat tire into standard car insurance everyone have to have... In my opinion, health insurance has its place to insure unknown/unlikely events, not routine stuff. Why it matters, in my opinion. A significant chunk of costs is in administration - both on hospital and insurance sides. And these routine visits are likely getting a large chunk of it. More importantly, when patient pays directly to the health care provider - they are much likely to be more picky about quality, costs, convenience combination, unlike going through the insurance scenario, where the decision is mostly about "who is in the network, and how close they are". Missing such a direct relationship between patients and providers, in my opinion, puts upward pressure on prices (in addition to everything else).

lotsofpulp 6y ago

Overall health is not insurable. It’s a misnomer. There is a 100% chance of everyone needing healthcare in the future. US health insurance does a few things: 1) premiums partially serve as a tax to transfer wealth from young and healthy to old an sick 2) insurers healthcare recipient from the big costs (over out of pocket maximum - $7k to $13k per year), subject to in network providers 3) Negotiates pricing and determine appropriate level of healthcare, I.e. acts as informed agent for uninformed buyers The last one is controversial, but it’s funny since people complain about high insurance premiums and then also complain about insurance companies denying what might be frivolous charges by healthcare providers.

valenterry 6y ago
> There is a 100% chance of everyone needing healthcare in the future. 1) that's not true. One can die in an accident and not cause an future healthcare costs. 2) health care costs are of course insurable, why not? Just because everyone will create costs with a high chance does not mean that everyone will always create the same costs. The insurance is there for when you have some illness that causes more costs than you could afford.
- lotsofpulp 6y ago
  I didn't feel like writing 99.9999% chance at the time, so I rounded up to 100%. It's not insurable in the sense that at some point, the losses are so large and so frequent, that the insurer needs to collect premiums from almost everyone in order to cover the costs. At that point, the premiums start to resemble a tax. I actually do consider the premiums a tax for the following reasons: 1) there is a mandate to purchase health insurance (although now neutered in most states due to removal of federal tax penalty) 2) the maximum premium is set to 3x the lowest premium (means young people subsidize old people) 3) premiums can only vary based on age and tobacco use 4) there is an annual in network out of pocket maximum Another example of an uninsurable risk is insuring homes on the Florida and other Gulf states coastline for flooding. No private insurer would touch this market since the losses are so high, so the government created the National Flood Insurance Program, which is the federal taxpayers taking on the liability for flood damage for those homes.
  - valenterry 6y ago
    > It's not insurable in the sense that at some point, the losses are so large and so frequent, that the insurer needs to collect premiums from almost everyone in order to cover the costs. I actually do consider the premiums a tax for the following reasons Could it be that you limit your perspective onto only the US at the current point in time? Otherwise what you say just doesn't make any sense and your points can't be generalized. And even in the US, health insurance is not mandatory (as you say yourself), hence I would still not call it a tax. > No private insurer would touch this market since the losses are so high, so the government created the National Flood Insurance Program, which is the federal taxpayers taking on the liability for flood damage for those homes. Yeah, so if you don't talk about flooding being insurable in general but that there just isn't any company that is doing it for Florida then I agree. And to be honest, I think it's not good that the taxpayers are paying here. The nice thing about insurance is that it gives incentives, such as "don't live somewhere if you can't afford the dangers at this place".
    - lotsofpulp 6y ago
      >Could it be that you limit your perspective onto only the US at the current point in time? Otherwise what you say just doesn't make any sense and your points can't be generalized. And even in the US, health insurance is not mandatory (as you say yourself), hence I would still not call it a tax. What I mean by insurable and uninsurable is that an entity can come in and sell insurance which can benefit the buyer alone, and is not an explicit subsidy to the other insureds in the risk pool. However, for health, it's a no brainer to opt out of health insurance between ages 20 and 40 (maybe not if you're a woman that's going to have kids). This makes the risk pool completely full of people experiencing losses and that point, it's just a cost sharing arrangement. I.e. Auto insurance premiums reflect the loss the insurance company will experience from your driving. Home insurance premiums reflect the loss the insurance company will experience from damage to your home. Life insurance will reflect the loss the insurance company will experience from your death. But health insurance (as implemented in the US) premiums explicitly reflect the loss the insurance companies experience from older, sicker people due to the various stipulations I listed in my posts above. >And to be honest, I think it's not good that the taxpayers are paying here. The nice thing about insurance is that it gives incentives, such as "don't live somewhere if you can't afford the dangers at this place". I agree, and that's why I don't like using the word insurance when it's not really insurance in the conventional sense. It's a tax, which I'm not opposed to, but I think there is value in recognizing that health insurance premiums are explicitly going to pay for healthcare for other people. This manifests itself every time someone complains about ACA causing health insurance premiums to increase, as if the law or insurers caused the premiums to go up. What really happened is the law allowed more healthcare to be provided to more people, and the way it funded it was by increasing health insurance premiums and having everyone pay (i.e. the mandate to purchase health insurance), and I think we'd be better off if we referred to this as a tax and recognize that the increase in insurance premiums is going towards benefiting others by giving them access to previously inaccessible healthcare.
hippich 6y ago
I believe you mean "overall health" as in a continuum of the living being life health. What I mean by insurance is a contract that specifies what risks can be insurance, up to what limit and how much it will cost. You unlikely to have problems to insure a new car bought off the dealer lot. You will likely have problems insuring a very old car, with missing brakes and flat tires. Similarly, health insurance is quite possible for healthy folks in their 20ies-40ies (maybe? just an example of the age range). And, like you said, insurance payout becomes likely certain and potentially unlimited if you try to insure someone who is 90 old. All that doesn't mean that health insurance can not exists as a thing. It just means that insurance is a tool that applicable to a specific scenarios and not a blanket solution for health care. And what discussions happens in the US, somehow it is either health insurance takes care of everything, or it is government takes care of everything. I think there is a place for both tools (and perhaps even more others i can't think of right now). EDIT: another thing that bothers me about health insurances in the USA - it is expected that insurance is involved in every single case of working with health care providers. I do not think annual flu shots is a risk that needs to be insured (it is known, and can be planned upfront for). Similarly, a visit to the family practice with a cold or ear infection does not need to be insured. Bringing back car example - it would be like bundling annual oil change, or a flat tire into standard car insurance everyone have to have... In my opinion, health insurance has its place to insure unknown/unlikely events, not routine stuff. Why it matters, in my opinion. A significant chunk of costs is in administration - both on hospital and insurance sides. And these routine visits are likely getting a large chunk of it. More importantly, when patient pays directly to the health care provider - they are much likely to be more picky about quality, costs, convenience combination, unlike going through the insurance scenario, where the decision is mostly about "who is in the network, and how close they are". Missing such a direct relationship between patients and providers, in my opinion, puts upward pressure on prices (in addition to everything else).