Essentially people that are buying policies with huge deductibles are buying catastrophic coverage. I haven’t found that insurance companies frown on selling these products at all. When I was shopping for my children, Blue Shield offered many policies with deductibles of $10,000. It is much cheaper to insure them privately rather than through my work simply because they are healthy. What I find terribly unfair is the hospital across the street offer their employees the exact same plan as we offer our employees, at 1/3 the price. Because they have thousands of lives and we have less than 50, we are penalized. For me to cover my entire family through work the premium would be $1900, $1300 of that I would have to pay.
But the thing with insurance for doctor’s visits, contraception, and prescription medicines is that you are not pooling any risk of uncertainty because all of us use those things, or will use them. There is no uncertainty. It would be like buying insurance to pay for gasoline in your car. You would have to pay full price and them some for the administrators to make money.
Yes, but it’s virtually impossible to determine where the line between risk and expectation lies. You expect to need to see a primary care physician, of course, but do you expect to see a proctologist? Half of us will, assuming we live long enough. Same with urologists, obstetricians, orthopaedic surgeons (roughly 7 million fractures per year in the US requiring medical attention) and so on.
That determination is even more difficult if you look at a lifetime, as Romney seems to suggest should be the case.
That’s not bad. My insurance policy does the typical 80/20 % coverage, and copay visits to the doctor are $20 bucks. Course the problem is that the routine is now extremely expensive. Unless you are very lucky and never need diagnostic testing, castrrophic insurance is risky. A MRI scan alone can cost between 1K-5K. Doctors now tend to diagnosis on process of elimination, in my experience.
It’s hard to believe, but I truly feel my parents generation enjoyed a better quality of healthcare and it was affordable back then. Doctors relied on their instincts and personal knowledge to come up with better diagnosis than misleading tests like MRIs or CT scans.
It’s hard to believe because it’s a ridiculous claim, except for the affordability part.
Can the OP explain the difference between high deductible plans and catastrophe insurance? I essentially made the choice you describe when I went to part time work and my employer wanted me to foot the bill for the more traditional insurance they offered. I figured myself as healthy and not needing any routine care, so I instead chose to buy a plan on my own with a 10,000 deductible for less than 70 dollars a month. I don’t actually bother to see a GP, but I would get one annual checkup for a straight 20 co-pay as long as I stayed in network, if I wanted. Everything else is on me.
I’ve never had to use it for its intended purpose, and my solution to keep costs low is to use the Urgent Care nearby that gives options for sending lab work to cheaper labs and gives a discount if you pay by cash/check. I like that they are able to quote me a (likely) price before I am even seen.
I think the only scam that is going on is the preferred price they negotiate with doctors, labs and hospitals. Some of the prices for bloodwork especially are so disproportionate between complexity, age and cost that private individuals frequently pay 10x or more than insurance companies pay, and often they are paying 10-20 [insurance companies] times what the tests cost to run.
That’s not a scam. That’s the Invisible Hand at work. Sure does suck, though.
It does suck when smaller groups get hit with high rates. It might be that the people in the group are older than average, or one or more has an expensive, chronic condition- 50 people isn’t a big enought pool to spread it out. The other thing is that small groups don’t like to (and often can’t) assume risk, so they opt for more expensive fully insured, or self-insured with stoploss policies as opposed to the cheaper self-insured contracts the huge companies get, again because they can mitigate risk by having a huge pool.
The difference between a high deductible plan and a catastrophic plan, is well, the high deductible plan covers anything above a certain amount and a catastrophic plan covers a particular range of services. I am probably wrong and there is likely no difference, just two different names.
For those that claim that catastrophic insurance is too expensive anyway, you are completely missing the point. If you have to pay a relatively high premium anyway for catastrophic coverage, then that is because there is an enormous payout if you need to use it. As others have mentioned, the payout can be hundreds of thousands or even millions depending on the severity. However when you separate catastrophic from routine, you are saving money no doubt. If your premium is 800/month, of which 400/month is catastrophic and 400/month routine, then the catastrophic may be worth it but the routine care is almost never worth it.
Even for catastrophic the insurance company makes off, but again you are insuring against something that you are never expecting to happen, ever, in your entire lifetime. Think of life insurance. You are paying a smaller premium for something that you expect is never going to happen, dying very early. However if you paid for a 65+ insurance plan, which everyone will reach, then it is a complete ripoff because the payout is virtually guaranteed.
Car repair is another example of extreme ripoff. Everyone knows that their car will need repairs at some point, so paying “car repair insurance” is by definition an extreme ripoff. Gas insurance is a great example too, if you normally pay 40$/week at the pump, and your insurance is 200$/month, then you are getting ripped off straight up. Yes, you may end up having to drive 10 hours away for an emergency, but on the week to week you are lining the pockets of the executives.
The line is drawn at a dollar amount, negotiated between you and the insurance. Either that or specific procedures or conditions, again negotiated between you and an insurance company.
You may or may not ever see a proctologist but it is extremely likely that you will see a specialist at some point. Thus, it is considered routine for a very high percentage of the population and silly to insure yourself against something that is probably going to happen.
Not sure what you mean by this. Yes, the more customers the better rate usually is negotiated by the insurance company. Still, the insurance company ALWAYS makes a profit on a large group of people. Regardless of the number or conditions in the group. It is still always a cheaper option to opt out of insurance. In fact it is even smarter to opt out of a small group policy because you may be paying for some oldhead’s health care.
I don’t think you really understand why people purchase insurance. Hint: it’s not because they know things aren’t going to happen.
It’s because people like having to pay one inflated flat rate for healthcare?
Yes, pretty much. It’s not just about whether you can predict an occurrence. It’s also about whether you can predict when it will occur. Certainly health insurance costs more than it benefits most people, but if you get sick the day after you start saving the money you spent on premiums, you’re pretty fucked.
Then why not just purchase health care, not health insurance?
Flat rate, and much lower corporate overhead. Thus, cheaper rates. Additionally, less fighting with corporations whose goals are to profit, not be compassionate.
Because people who have health insurance can afford to pay their monthly premium today. They may not be able to pay for cancer surgery tomorrow. That’s my point: in the long run, health insurance (or almost any insurance) is a loser, but you’re not buying it for the long run.
Then have insurance only cover high claims costs?
I think that’s our point. We know that we will need doctor visits, prescriptions, and contraception. You can’t insure against it.
We don’t know if we will need heart transplants or cancer treatments. Not everyone will, nor can most people pay out of pocket if they do need it. Those things you insure against.
That’s why the current model is broken. Prices for routine procedures skyrocket because a third party pays.
Not really. A third party pays for routine procedures in single-payer systems and yet the prices are far lower than ours. Anyway, this takes us back to the first point I made on this page, which is that the dividing line between “routine” and non-routine is unclear.
It’s no more unclear than your homeowner’s insurance. Your homeowner’s insurance doesn’t cover light bulbs and a/c filters. You know you will need them. It does cover fire damage because that is an unknown that most people can’t afford to pay out of pocket.
Then you have big ticket items like central heat and a/c. Some people get warranties (like insurance) on those. Some save to pay for when it breaks down. Some people go into debt when they break down. Some people move often enough to where they never have to replace a unit.
Just like health care.
Only it would be like if in the homeowner’s example, we paid for poor people who couldn’t afford new central heat in the winter time. And we also paid for people who refused to buy warranties that could afford the warranty payments. We recognize that this is a problem. However, instead of correcting the problem, and requiring those that can afford it to make catastrophic payments, we mandate that all homeowners buy insurance that requires an electrician to come in a replace a light bulb free of charge.
It’s a basic insurance principle: You can only insure against fortuitous events. If you KNOW that you are going to get into an accident tonight that is your fault, you will beef up your insurance coverage. The whole system fails.
Just like you KNOW that you will need doctor visits and prescription medicine. If you try to insure against that, you will pay full cost, plus insurance (or government bureaucracy in single payer systems) overhead expenses, because that’s exactly what the third party expenses are.
And you can’t compare other countries to the United States. It is well-settled that drug manufacturers sell drugs at a discount to countries like Canada and the UK and at a huge discount to developing countries. So much so that a recurring debate is when the government tries to buy prescription drugs BACK from Canada because they’ve purchased them at a government mandated discount.
Drug manufacturers are able to do this because they can make profits off of the free market U.S. system. You don’t like drug manufacturers and their profits? Then you won’t like the new meds that might save your life, or the new erection pill that improves the quality of your sex life. If the money isn’t there, it won’t be created.
So, in my fiefdom, insurance would be divorced from employment entirely. No reason for me to get fired and have to lose my house or car insurance. The routine health care items of life like doctor visits and prescriptions should be paid out of pocket, open to the free market with prices being advertised and negotiated. Drug laws should be largely reformed so that I don’t have to go to the doctor for a medicine I know I need. If I know how to rewire the kitchen light switch, I don’t need to call an electrician; I can do it myself.
Only for the unexpected should we risk pool our money. And as harsh as it is to say, there has to be some kind of cost control at the upper end (don’t ask me how to implement it). I know that it is human life we are talking about, but we shouldn’t be spending tens of thousands in medical care for a 100 year old to get a pacemaker, anymore than you would spend tens of thousands to fix an old wrecked car.
And yes, I know that human life does not equal cars, but there has to be a limit because money has a limit. Will that mean that rich people get better care? Of course. They also have larger houses, nicer cars, eat better food, and take nicer vacations than me. It sucks, but that’s life.