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To stay in business, casinos need to be a bad deal for customers _as a group_. Did I say casinos? I meant insurance companies. Seriously, insurance is a bet o
by 6cxs2hd6 13y ago
To stay in business, casinos need to be a bad deal for customers _as a group_.
Did I say casinos? I meant insurance companies.
Seriously, insurance is a bet on something bad happening. Usually it only makes sense to buy insurance for the equivalent of long-shot "lottery jackpots". Like a catastrophic health problem. Or like the damage you might do to other people and their property in an auto accident --- but probably _not_ the damage to your own car. i.e. Insure for personal liability calamities, but not collision damage if you could pay for it out of savings.
- aninhumer 13y agoInsurance is the opposite of gambling. You take a guaranteed loss instead of risking a huge one. Not having insurance is a bet that nothing bad will happen. If you can afford to replace everything you own out of savings, good for you, but most people can't.
- roc 13y agoBeyond that, given the perverse 'market' for health care in the US, even if you can (theoretically) afford to self-insure, the pricing mechanisms and negotiating power of insurance companies practically ensures that they can offer you premiums for less than your out-of-pocket cost for even fairly pedestrian services.
- mcdougle 13y agoThere are (or at least were when I sold insurance) products that costed very little (compared to an actual plan) that provided you with the negotiated price the insurance company would pay if something happens. If you can afford to self-insure, the best bet would be to buy one of these products and store the rest in the bank. No clue if those things exist anymore with everything going on in the world of health insurance, though.
- tanzam75 13y agoBut you really can't afford to self-insure, even if you're young and healthy. There's always the small but real chance of getting a catastrophic illness and running up a million dollar bill. Therefore, you really need to buy at least catastrophic coverage. And that's real insurance, not self-insurance.
- tedunangst 13y agoHealth insurance is complicated because for most people, it's so much more than just insurance. It's prepaying $300 a month so you don't have to pay $200 to visit the doctor once per year. No, I don't know why people do that. You're right that paying $100 a month for "please reattach my severed limbs" insurance is more affordable. Terminology be damned, that's possibly what people mean by "self-insured". They pay day to day expenses out of pocket.
- eru 13y agoFortunately, the catastrophic insurance can be pretty cheap, if you choose a high excess.
- ars 13y agoYou don't completely self-insure, instead you get a high deductible play ($5,000 - $15,000) - also called major medical or catastrophic insurance. That way you insure the vast majority of things, but you are covered for the really insane stuff, plus you get the benefit of the negotiated rates.
- Osmium 13y ago> If you can afford to replace everything you own out of savings, good for you, but most people can't. Exactly this. The advice I was always given is that if you can afford to replace x (whatever x is) if something bad were to happen, then it's better not to bother. But if you can't, and x is necessary for your life, then you need to accept insurance as a necessary evil.
- 6cxs2hd6 13y ago> If you can afford to replace everything you own out of savings, good for you, but most people can't. Not that it's relevant, but I can't. Anyway, I didn't say anyone should plan to replace everything from savings. My point is, whatever you _can_ replace from savings, don't waste money to insure _that_.
- a-priori 13y agoInsurance is accepting a small but certain loss to prevent a large and unlikely loss. Gambling is accepting a small but certain loss in the hopes of getting a large and unlikely gain. They're related but opposite concepts.
- jlgreco 13y agoThe Casino, not the gambler, counts on a constant stream of money coming in with the occasional large chunk of money going out. Insurance companies operate the same.
- hrkristian 13y agoWhat you're both describing is socialism, insurance is opt-in socialism, pure and simple.
- jlgreco 13y agoUh... okay. If you want to call it that, that is fine. Not sure how that is relevant though.
- JoeAltmaier 13y agoSocialism is a lot more than a single economic exchange - its a system. Perhaps what they're describing is cooperative or risk-sharing. But its no more 'Socialism' with a big-S than its Monarchy. To quote Billy Crystal - I eat a burrito - I'm not Mexican.
- derleth 13y agoYou know what's really socialistic? The systems inside any large company. You need a computer and a cubical? These things will be provided to you, in return for your work. Nothing reasonable is denied as long as your productivity justifies it, comrade! "From each according to his ability, to each according to his need." -- Karl Marx. Not a misquote.
- xerophtye 13y ago
- jronkone 13y agoPlease don't compare insurance companies to casinos. In casinos the odds are completely computable and known beforehand to everyone. Not so with insurance which deals with real life.