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>The purpose if insurance is not to help us pay for things that we literally do not have enough money to pay for. It does help in that situation, but... 56% of

>The purpose if insurance is not to help us pay for things that we literally do not have enough money to pay for. It does help in that situation, but... 56% of Americans cannot cover a $1000 emergency expense. Insurance absolutely is a lifeline that most people need to avoid financial ruin. Edit: My source for the 56%: https://www.cnbc.com/2022/01/19/56percent-of-americans-cant-cover-a-1000-emergency-expense-with-savings.html https://www.cnbc.com/2022/01/19/56percent-of-americans-cant-... Which downthread was pointed out that it was derived from this survey: https://www.bankrate.com/banking/savings/emergency-savings-report/#sudden-bill https://www.bankrate.com/banking/savings/emergency-savings-r...

MathMonkeyMan 2y ago
If I were to buy health insurance, it would cost between $400 and $800 per month. It would likely not cover me from financial ruin anyway. If I'm uninsured, I receive treatment and never pay the bill. Maybe this affects my credit, but it is not financial ruin. In reality, I get good health insurance through an employer. When I am employed. $1000 is nothing compared to the expense of being insured.
- pavel_lishin 2y ago
  > If I'm uninsured, I receive treatment I think this is true if you walk into an emergency room with a life-threatening illness; is this true if you start developing tooth problems, or diabetes? Can I walk into the ER with bad kidneys and get a round of dialysis on the house?
  - nradov 2y ago
    Yes, you can get a round of dialysis. Patients with end-stage renal disease qualify for Medicare which covers most of the cost.
    - pavel_lishin 2y ago
      How long does it take to get approved? I guess renal failure isn't exactly a thing that sneaks up on you, but I do wonder what happens if there's some catastrophic incident that results in an ongoing medical issue; can you just keep showing up to the ER for treatment while enrollment goes through?
epistasis 2y ago
The median bank account balance is $8000: https://www.bankrate.com/banking/savings/savings-account-average-balance/ https://www.bankrate.com/banking/savings/savings-account-ave... I'm not sure where you got that stat, but would like to know if it's reconcilable with bank account balances.
- c22 2y ago
  The stat is from Bankrate's annual survey [0]. Every year all the outlets breathlessly report on how many Americans can't afford a $1000 expense, but this is a disingenuous reading of the data. The actual question asked is: "Which of the following best describes how you would deal with a major unexpected expense, such as $1,000 for an emergency room visit or car repair?" And the number reported (which is usually above 50%) is derived from everyone who didn't respond: "Pay the cost from your savings" [0]: https://www.bankrate.com/banking/savings/emergency-savings-report/#sudden-bill https://www.bankrate.com/banking/savings/emergency-savings-r...
  - relaxing 2y ago
    How is it disingenuous? The only other option for affording that ER visit is the 16% who say they could cut $1000 in discretionary spending to cover it. Taking out an unsecured loan isn’t it.
    - c22 2y ago
      Well, 5% said "Something else," so the most charitable reading already puts us at 65% being able to afford it. But the way the question is worded leaves a lot of fuzzy room around the edges. For instance, a financially illiterate person may elect to put it on credit despite having enough liquid wealth not to need to (to get the airline points perhaps?) A shrewd investor may be able to cover it with a personal loan or by borrowing from family with a favorable rate that is lower than the expected return on their investments. The question asks which best describes what you would do in an emergency and only invokes $1000 as an arbitrary example. Some respondents may simply be confused or pedantic in their response. Additional bias can be injected when this number is re-reported by third parties, I've seen it reported as "X% of Americans..." "...Don't have $1000" "...Can't afford $1000 expense" "...Don't have $1000 in savings" "...Couldn't come up with $1000 in an emergency" And several other hyperbolic variations.
stonesthrowaway 2y ago
> 56% of Americans cannot cover a $1000 emergency expense. Insurance absolutely is a lifeline that most people need to avoid financial ruin. If you can't muster $1000, then you are in financial ruin. Insurance is pointless for these people.
- wakawaka28 2y ago
  Indeed. Those people have real imminent problems to prepare for above and beyond hypothetical ones that insurance is for. Except for legally required insurance I think they probably shouldn't get insurance, and instead dedicate their resources to being healthy and improving their finances.

MathMonkeyMan 2y ago

If I were to buy health insurance, it would cost between $400 and $800 per month. It would likely not cover me from financial ruin anyway. If I'm uninsured, I receive treatment and never pay the bill. Maybe this affects my credit, but it is not financial ruin. In reality, I get good health insurance through an employer. When I am employed. $1000 is nothing compared to the expense of being insured.

pavel_lishin 2y ago
> If I'm uninsured, I receive treatment I think this is true if you walk into an emergency room with a life-threatening illness; is this true if you start developing tooth problems, or diabetes? Can I walk into the ER with bad kidneys and get a round of dialysis on the house?
- nradov 2y ago
  Yes, you can get a round of dialysis. Patients with end-stage renal disease qualify for Medicare which covers most of the cost.
  - pavel_lishin 2y ago
    How long does it take to get approved? I guess renal failure isn't exactly a thing that sneaks up on you, but I do wonder what happens if there's some catastrophic incident that results in an ongoing medical issue; can you just keep showing up to the ER for treatment while enrollment goes through?

epistasis 2y ago

The median bank account balance is $8000: https://www.bankrate.com/banking/savings/savings-account-average-balance/ https://www.bankrate.com/banking/savings/savings-account-ave... I'm not sure where you got that stat, but would like to know if it's reconcilable with bank account balances.

c22 2y ago
The stat is from Bankrate's annual survey [0]. Every year all the outlets breathlessly report on how many Americans can't afford a $1000 expense, but this is a disingenuous reading of the data. The actual question asked is: "Which of the following best describes how you would deal with a major unexpected expense, such as $1,000 for an emergency room visit or car repair?" And the number reported (which is usually above 50%) is derived from everyone who didn't respond: "Pay the cost from your savings" [0]: https://www.bankrate.com/banking/savings/emergency-savings-report/#sudden-bill https://www.bankrate.com/banking/savings/emergency-savings-r...
- relaxing 2y ago
  How is it disingenuous? The only other option for affording that ER visit is the 16% who say they could cut $1000 in discretionary spending to cover it. Taking out an unsecured loan isn’t it.
  - c22 2y ago
    Well, 5% said "Something else," so the most charitable reading already puts us at 65% being able to afford it. But the way the question is worded leaves a lot of fuzzy room around the edges. For instance, a financially illiterate person may elect to put it on credit despite having enough liquid wealth not to need to (to get the airline points perhaps?) A shrewd investor may be able to cover it with a personal loan or by borrowing from family with a favorable rate that is lower than the expected return on their investments. The question asks which best describes what you would do in an emergency and only invokes $1000 as an arbitrary example. Some respondents may simply be confused or pedantic in their response. Additional bias can be injected when this number is re-reported by third parties, I've seen it reported as "X% of Americans..." "...Don't have $1000" "...Can't afford $1000 expense" "...Don't have $1000 in savings" "...Couldn't come up with $1000 in an emergency" And several other hyperbolic variations.

stonesthrowaway 2y ago

> 56% of Americans cannot cover a $1000 emergency expense. Insurance absolutely is a lifeline that most people need to avoid financial ruin. If you can't muster $1000, then you are in financial ruin. Insurance is pointless for these people.

wakawaka28 2y ago
Indeed. Those people have real imminent problems to prepare for above and beyond hypothetical ones that insurance is for. Except for legally required insurance I think they probably shouldn't get insurance, and instead dedicate their resources to being healthy and improving their finances.