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> US health insurance coverage is very insurance-like, due to the out of pocket maximum. Well, other than that whole "out of network" thing... > Determining h

> US health insurance coverage is very insurance-like, due to the out of pocket maximum. Well, other than that whole "out of network" thing... > Determining health insurance coverage can't be simple, because fixing bodies is not simple. It's unknown what will and will not fix issues, how to even measure if there is an issue, and what will cause more issues and the cost/benefit of that fix. Don't disagree - but that doesn't make what we have more "insurance-like".

lotsofpulp 9mo ago
What is the alternative to a network? Auto insurers, home insurers, all kinds of insurance relies on negotiating prices with sellers. Insurance cannot work if any seller can send a bill for any amount to the insurer and be owed that amount.
- FireBeyond 9mo ago
  I mean for most auto and home insurers, the "negotiated price" is a pretty loose thing. My insurer might ask for a quote from someone in their "preferred network" but I can get a quote from anyone I want to do the work, and if it's within x% of the preferred quote, it's automatically approved, otherwise someone from the insurer calls them and asks about the different pricing, and I've generally got that approval within 24-48 hours. (Which has also worked in my favor - with an auto glass claim, their repairer was insistent that third party glass would work fine, despite the HUD, but the other was able to demonstrate to the insurer that OEM glass was required). Mostly this all boils down to "the healthcare industry in the US needs to be comprehensively revamped in any one of several different ways or methodologies, but likely won't be".
  - lotsofpulp 9mo ago
    > but I can get a quote from anyone I want to do the work, and if it's within x% of the preferred quote, it's automatically approved, It would be the same in healthcare if quotes were for 4 and low 5 figures with no future costs. Not only does healthcare easily reach into the 5, 6, and 7 figures, but the health insurance company is also on the hook for myriad known and unknown issues caused by the initial costs.
    - FireBeyond 9mo ago
      > It would be the same in healthcare if quotes were for 4 and low 5 figures with no future costs. I mean, this is somewhat the same in auto, too. Is one of the reasons you're recommended to go through insurance even if involved in an accident and the other party offers to give you cash for the initial quote - it's quite common that they start repair work and find other issues because they hadn't removed components or panels to give you a quote. Got cash from someone? Now you have to go back and say "Well, I know the quote said $1,500, but they took off the back quarter panel and found other issues and now it's $3,800..." That being said, ICD codes, one of the cornerstones of billing, are predicated around "encounters", and certainly not "future costs". > is also on the hook for myriad known and unknown issues caused by the initial costs. There's a pretty huge asterisk to all that. Health insurers are adept at neatly sidestepping any obligations. They've fought and won many many times over in court on similar issues, "Insurer is denying me care and I'm going to die/suffer serious issues as a result!" Insurer's response, which has been held in court many times over? "We're not denying you any care at all, we're just declining to accept financial responsibility for it. You're free to get that care and be directly billed."
      - lotsofpulp 9mo ago
        >There's a pretty huge asterisk to all that. Health insurers are adept at neatly sidestepping any obligations This might sidestep some obligations, rightly or wrongly. They clearly do not sidestep "any" obligations. The amount of money spent on healthcare claims (medical loss ratios) is public information, available in their SEC filings. It is required to be 80% or more by law. https://www.oliverwyman.com/our-expertise/insights/2023/mar/health-insurer-financial-insights-volume-11-p1.html https://www.oliverwyman.com/our-expertise/insights/2023/mar/... Every state government has an insurance regulator that also has to approve insurance prices, which are based on the cost of claims. The regulator is not going to let an insurer increase premiums just for profit. Also, the non profit and for profit insurers have similar premiums, with the for profit insurers having ~3% profit margins or less, indicating a highly competitive market where the revenue is barely covering costs. Shareholders aren't making any money either (10 year returns lag SP500): https://totalrealreturns.com/s/CVS,ELV,UNH,MOH,VOO,CNC,HUM,CI?start=2015-01-02 https://totalrealreturns.com/s/CVS,ELV,UNH,MOH,VOO,CNC,HUM,C... Finally, the fact that Buffett/Dimon/Bezos tapped out on creating a competitor should really drive home how little the profit potential is in health insurance, and any less "sidestepping" of obligations would lead to higher premiums. https://www.cnbc.com/2021/01/04/haven-the-amazon-berkshire-jpmorgan-venture-to-disrupt-healthcare-is-disbanding-after-3-years.html https://www.cnbc.com/2021/01/04/haven-the-amazon-berkshire-j...

lotsofpulp 9mo ago

What is the alternative to a network? Auto insurers, home insurers, all kinds of insurance relies on negotiating prices with sellers. Insurance cannot work if any seller can send a bill for any amount to the insurer and be owed that amount.

FireBeyond 9mo ago
I mean for most auto and home insurers, the "negotiated price" is a pretty loose thing. My insurer might ask for a quote from someone in their "preferred network" but I can get a quote from anyone I want to do the work, and if it's within x% of the preferred quote, it's automatically approved, otherwise someone from the insurer calls them and asks about the different pricing, and I've generally got that approval within 24-48 hours. (Which has also worked in my favor - with an auto glass claim, their repairer was insistent that third party glass would work fine, despite the HUD, but the other was able to demonstrate to the insurer that OEM glass was required). Mostly this all boils down to "the healthcare industry in the US needs to be comprehensively revamped in any one of several different ways or methodologies, but likely won't be".
- lotsofpulp 9mo ago
  > but I can get a quote from anyone I want to do the work, and if it's within x% of the preferred quote, it's automatically approved, It would be the same in healthcare if quotes were for 4 and low 5 figures with no future costs. Not only does healthcare easily reach into the 5, 6, and 7 figures, but the health insurance company is also on the hook for myriad known and unknown issues caused by the initial costs.
  - FireBeyond 9mo ago
    > It would be the same in healthcare if quotes were for 4 and low 5 figures with no future costs. I mean, this is somewhat the same in auto, too. Is one of the reasons you're recommended to go through insurance even if involved in an accident and the other party offers to give you cash for the initial quote - it's quite common that they start repair work and find other issues because they hadn't removed components or panels to give you a quote. Got cash from someone? Now you have to go back and say "Well, I know the quote said $1,500, but they took off the back quarter panel and found other issues and now it's $3,800..." That being said, ICD codes, one of the cornerstones of billing, are predicated around "encounters", and certainly not "future costs". > is also on the hook for myriad known and unknown issues caused by the initial costs. There's a pretty huge asterisk to all that. Health insurers are adept at neatly sidestepping any obligations. They've fought and won many many times over in court on similar issues, "Insurer is denying me care and I'm going to die/suffer serious issues as a result!" Insurer's response, which has been held in court many times over? "We're not denying you any care at all, we're just declining to accept financial responsibility for it. You're free to get that care and be directly billed."
    - lotsofpulp 9mo ago
      >There's a pretty huge asterisk to all that. Health insurers are adept at neatly sidestepping any obligations This might sidestep some obligations, rightly or wrongly. They clearly do not sidestep "any" obligations. The amount of money spent on healthcare claims (medical loss ratios) is public information, available in their SEC filings. It is required to be 80% or more by law. https://www.oliverwyman.com/our-expertise/insights/2023/mar/health-insurer-financial-insights-volume-11-p1.html https://www.oliverwyman.com/our-expertise/insights/2023/mar/... Every state government has an insurance regulator that also has to approve insurance prices, which are based on the cost of claims. The regulator is not going to let an insurer increase premiums just for profit. Also, the non profit and for profit insurers have similar premiums, with the for profit insurers having ~3% profit margins or less, indicating a highly competitive market where the revenue is barely covering costs. Shareholders aren't making any money either (10 year returns lag SP500): https://totalrealreturns.com/s/CVS,ELV,UNH,MOH,VOO,CNC,HUM,CI?start=2015-01-02 https://totalrealreturns.com/s/CVS,ELV,UNH,MOH,VOO,CNC,HUM,C... Finally, the fact that Buffett/Dimon/Bezos tapped out on creating a competitor should really drive home how little the profit potential is in health insurance, and any less "sidestepping" of obligations would lead to higher premiums. https://www.cnbc.com/2021/01/04/haven-the-amazon-berkshire-jpmorgan-venture-to-disrupt-healthcare-is-disbanding-after-3-years.html https://www.cnbc.com/2021/01/04/haven-the-amazon-berkshire-j...