# Trying to understand the basics of health insurance **URL:** \ **Category:** Great Debates\ **Created:** [October 15, 2013, 6:17pm UTC](https://boards.straightdope.com/t/trying-to-understand-the-basics-of-health-insurance/671330 "2013-10-15T18:17:12Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [October 17, 2013, 12:43am UTC](https://boards.straightdope.com/t/trying-to-understand-the-basics-of-health-insurance/671330/41 "2013-10-17T00:43:10Z")
Are you under the impression that insurance companies will routinely pay claims for ED visits for non-emergencies? At best, the patient will have a high co-pay. At worst, they’ll deny the claim. ---
**Author:** ![Nars\_Glinley](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/nars_glinley/32/8177_2.png) [@Nars\_Glinley](https://boards.straightdope.com/u/Nars_Glinley)\ **Post date:** [October 17, 2013, 1:43am UTC](https://boards.straightdope.com/t/trying-to-understand-the-basics-of-health-insurance/671330/42 "2013-10-17T01:43:33Z")
> [@Dewey\_Finn](#): > > Are you under the impression that insurance companies will routinely pay claims for ED visits for non-emergencies? At best, the patient will have a high co-pay. At worst, they’ll deny the claim. I don’t think a poor patient will be able to pay their high co-pay or their hospital bill. ---
**Author:** ![Farin](https://avatars.discourse-cdn.com/v4/letter/f/e79b87/32.png) [@Farin](https://boards.straightdope.com/u/Farin)\ **Post date:** [October 17, 2013, 2:13am UTC](https://boards.straightdope.com/t/trying-to-understand-the-basics-of-health-insurance/671330/43 "2013-10-17T02:13:47Z")
> [@thatguyjeff](#): > > This is patently false. Just because an entity is not government run/funded, does not make it a for profit company. There are MANY hospitals AND health insurance companies around the country that are not-for-profit/non-profit. > > Minnesota, for example, has state regulations which severely limit for-profit health insurance companies. United Healthcare Group - the largest health insurer in the country - is a for-profit with its headquarters in Minnesota and they are not allowed to market/sell many of their products in their home state because of their for-profit status. And as far as I’m aware, there isn’t a single for-profit hospital in that state. I apologize, I exaggerated. But roughly 35% (instead of “all”) of the hospitals in the US is for-profit. The insurances, on the other hand, that aren’t for-profit are few. You have about 20 BCBS affiliations, a few regionals like Harvard Pilgrim in the northeast, and the rest are profit-motivated. The pharmaceutical industry is completely centered on profit. And the for-profit bias in hospitals is _growing_. > [@Nars\_Glinley](#): > > True but I don’t think that’s the issue. People are going to the ER for minor illnesses, not physicals. People will (IMHO) continue to have routine illnesses and abuse the ER system due to high deductibles. > [@Dewey\_Finn](#): > > Are you under the impression that insurance companies will routinely pay claims for ED visits for non-emergencies? At best, the patient will have a high co-pay. At worst, they’ll deny the claim. The big problem with ER visits is what everyone tends to ignore: If I go to my PCP, I wait three weeks just to get my foot in the door. For my yearly turn and cough? I’ll schedule that several months in advance. For most common things though, i don’t even bother. Most colds/flus/etc I just treat with something OTC and get on with my life. So if I have a flu-like set of symptoms, I wait a week and, if I still got them, I go to urgent care, where I can be seen in two hours or so and then sent to an ER if something is eating through my insidey parts. Now, what happens if I end up having the latest in stomach cancers? Well, I didn’t go to my PCP and get a preventative checkup for it, and now I’m in the ER for it. Yay! I’m a statistic! So while there are issues with not getting in early enough, most people are busy with life in general and they don’t have time to wait for their PCP to be available when they get a symptom of some kind. A lot of poor people would go to a free/low cost clinic if they could, but getting into those is **even harder** than trying to get into a PCP. That’s the main reason the underinsured use ERs (And also why even some insured use ERs). The ACA attempts to help this by allowing you to see an PA or NP, but that’s not really adding a lot of capacity to the PCP pool in general. It may in the future, but we are already going to nose dive in PCP population (which we have been warned about for the last 10+ years). The ACA doesn’t offer any incentives for someone to become a PCP compared to a specialist of some kind. We will have to find some way to address this issue if we truly want to drop the number of ER visits. After all, wait timer were such a major issue that Canada spent something like $5 billion to decrease wait times in Canadian health starting in 2003. We will need to do the same. ---
**Author:** ![jacobsta811](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jacobsta811/32/2893_2.png) [@jacobsta811](https://boards.straightdope.com/u/jacobsta811)\ **Post date:** [October 17, 2013, 3:26am UTC](https://boards.straightdope.com/t/trying-to-understand-the-basics-of-health-insurance/671330/44 "2013-10-17T03:26:43Z")
> [@scr4](#): > > Not if it changes what type of medical services are used. As already pointed out, people without health insurance tend to use the emergency room as their first and only medical care. Emergency rooms are _very_ expensive to operate. > > Also, preventive care and management of chronic diseases can reduce the need for more drastic procedures which costs more. > > But it just happens that it saves big bucks, as evident from comparing US health care costs to countries with universal health care. On point 1), while true, I’d still bet big $ against you - whatever minor reduction in ER visits and chronic condition management expenses will be dwarfed by increased usage in general IMO. On point 2) IMO it isn’t Universal health care that saves the big bucks, but essentially wage & price controls on Health care providers and Health care services that save the big bucks. We went out of our way _not_ to do anything like that with the ACA (which is why I think the ACA is far better than our current system, but still crap). ---
**Author:** ![bldysabba](https://avatars.discourse-cdn.com/v4/letter/b/ecccb3/32.png) [@bldysabba](https://boards.straightdope.com/u/bldysabba)\ **Post date:** [October 17, 2013, 7:29am UTC](https://boards.straightdope.com/t/trying-to-understand-the-basics-of-health-insurance/671330/45 "2013-10-17T07:29:15Z")
> [@Farin](#): > > If you look at Canada or Britain, you become a doctor and generally get paid by the government not on a per-incident fee but on a meritory or statutory salary. So you go to work for the government (unless you go into something like cosmetic surgery) and they control access to the services of the doctors, generally on an immediate-need basis and then followed by FCFS. They can spend quite a bit less on health care for it. And, they predictably have fewer bright people who are willing to sign on and spend years of their lives slogging through medical school so that they can be paid government salaries instead of market determined rates. So then how do they make up the shortfall? Have doctors come in as immigrants, typically from third world countries where medical training is usually subsidised. [Link](http://www.ncbi.nlm.nih.gov/pmc/articles/PMC516656/) > [@](#): > > Specialist medical practice in the NHS has been heavily dependent on doctors who have trained abroad, particularly in specialties where posts have been hard to fill. > … > Of consultants appointed before 1992, 15% had trained abroad; of those appointed in 1992-2001, 24% had trained abroad. > > … > > Medical immigration into the United Kingdom has increased, and the United Kingdom is a substantial net importer of doctors.5,6 For example, 58% of all doctors who obtained full registration with the General Medical Council in 2002 qualified outside the United Kingdom. I’m a little bitter about this. By not letting the market decide doctor salaries, which _should_ be very high - these are very bright people who study very many years, work very hard and live very busy lives - they reduce the supply of people wanting to become doctors, and make up the shortfall from countries like India, which need those doctors quite a bit more. And then the NHS gets touted as a system everybody loves, because the distortionary costs can be passed on to someone else. ---
**Author:** ![Farin](https://avatars.discourse-cdn.com/v4/letter/f/e79b87/32.png) [@Farin](https://boards.straightdope.com/u/Farin)\ **Post date:** [October 17, 2013, 11:29am UTC](https://boards.straightdope.com/t/trying-to-understand-the-basics-of-health-insurance/671330/46 "2013-10-17T11:29:52Z")
> [@bldysabba](#): > > And, they predictably have fewer bright people who are willing to sign on and spend years of their lives slogging through medical school so that they can be paid government salaries instead of market determined rates. So then how do they make up the shortfall? Have doctors come in as immigrants, typically from third world countries where medical training is usually subsidised. > [Link](http://www.ncbi.nlm.nih.gov/pmc/articles/PMC516656/) Canadian GPs make in the area of $200,000 CND a year. That’s $195,000 USD/£125,000 British Pounds. US GPs make between $150,000 and $190,000 a year. Canadian short falls of providers aren’t from what the doctors are paid. British, shortfalls, however, certainly can be (but I have little experience with British health). British doctors who are apart of a clinical commission group make £54,319 to £81,969, which is significantly lower than Canadian or US doctors. ---
**Author:** ![MandaJo](https://avatars.discourse-cdn.com/v4/letter/m/ac91a4/32.png) [@MandaJo](https://boards.straightdope.com/u/MandaJo)\ **Post date:** [October 17, 2013, 5:08pm UTC](https://boards.straightdope.com/t/trying-to-understand-the-basics-of-health-insurance/671330/47 "2013-10-17T17:08:11Z")
> [@Farin](#): > > Canadian GPs make in the area of $200,000 CND a year. That’s $195,000 USD/£125,000 British Pounds. US GPs make between $150,000 and $190,000 a year. Canadian short falls of providers aren’t from what the doctors are paid. > > British, shortfalls, however, certainly can be (but I have little experience with British health). British doctors who are apart of a clinical commission group make £54,319 to £81,969, which is significantly lower than Canadian or US doctors. Relative cost and length of medical school must be factored into that, too. U.S. doctors average something like $250K in debt when they graduate, and those high salaries don’t start until the residency is over–which may be some years after graduation. ---
**Author:** ![Farin](https://avatars.discourse-cdn.com/v4/letter/f/e79b87/32.png) [@Farin](https://boards.straightdope.com/u/Farin)\ **Post date:** [October 17, 2013, 5:54pm UTC](https://boards.straightdope.com/t/trying-to-understand-the-basics-of-health-insurance/671330/48 "2013-10-17T17:54:10Z")
> [@MandaJo](#): > > Relative cost and length of medical school must be factored into that, too. U.S. doctors average something like $250K in debt when they graduate, and those high salaries don’t start until the residency is over–which may be some years after graduation. In that case, I need to be a doctor after schooling in Canada. According to [this site](http://www2.macleans.ca/2010/09/16/how-much-they-pay-for-it/), in the 2010/11 school year, tuition for doctors averaged $13,660 ($13000 USD) across all of Canada. In Britain, they charge roughly £4,000 ($6500 USD) a year. Canada is still heads, shoulders, and butts above Britain and the US in terms of pay. ---
**Author:** ![Mdcastle](https://avatars.discourse-cdn.com/v4/letter/m/958977/32.png) [@Mdcastle](https://boards.straightdope.com/u/Mdcastle)\ **Post date:** [October 18, 2013, 6:21pm UTC](https://boards.straightdope.com/t/trying-to-understand-the-basics-of-health-insurance/671330/49 "2013-10-18T18:21:00Z")
Insurance company worker: I can comment on paying non-emergency room visits. Some of our policies have the “prudent layperson” standard in writing, but we don’t enforce it. In fact most claims, including ER claims, are never touched by a human. To enforce it we’d have to have a staff physician or nurse manually review every ER claim (and we pay those people a lot), and probably request documentation from the provider, so it’s not worth our effort to deny ER claims. We do have blacklist of subscribers that are obviously abusing the system singled out for extra attention, usually the ones on Medicaid so they have no deductible or copay, but these are few and far between. ---
**Author:** ![jimpatro](https://avatars.discourse-cdn.com/v4/letter/j/b9e5f3/32.png) [@jimpatro](https://boards.straightdope.com/u/jimpatro)\ **Post date:** [October 18, 2013, 11:37pm UTC](https://boards.straightdope.com/t/trying-to-understand-the-basics-of-health-insurance/671330/50 "2013-10-18T23:37:17Z")
A government forcing an independent insurance company to insure someone with a pre-existing condition may not be socialist but it sure borders on totalitarian. It may be the warm and fuzzy thing to do but certainly not what one would expect in a free country. Oh yeah, I didn’t hear that on Fox News. ---
**Author:** ![bldysabba](https://avatars.discourse-cdn.com/v4/letter/b/ecccb3/32.png) [@bldysabba](https://boards.straightdope.com/u/bldysabba)\ **Post date:** [October 19, 2013, 9:39am UTC](https://boards.straightdope.com/t/trying-to-understand-the-basics-of-health-insurance/671330/51 "2013-10-19T09:39:22Z")
> [@jimpatro](#): > > A government forcing an independent insurance company to insure someone with a pre-existing condition may not be socialist but it sure borders on totalitarian. It may be the warm and fuzzy thing to do but certainly not what one would expect in a free country. Oh yeah, I didn’t hear that on Fox News. As a matter of fact, getting ‘insurance’ for pre-existing conditions is quite misleading. Insurance is by definition an attempt to insulate people from the impact of low probability but high impact events. A pre-existing condition means that’s not true anymore. ---
**Author:** ![Si\_Amigo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/si_amigo/32/2877_2.png) [@Si\_Amigo](https://boards.straightdope.com/u/Si_Amigo)\ **Post date:** [October 19, 2013, 5:42pm UTC](https://boards.straightdope.com/t/trying-to-understand-the-basics-of-health-insurance/671330/52 "2013-10-19T17:42:34Z")
It is when you have everyone in the pool. Like pretty much everyone of the nations we compete with economically do. It’s been shown to provide the same or better levels of overall care just about everywhere. Most everyone agrees that the model we had been working under was unsubstanible. You know what else everyone hates? Sore losers. ---
**Author:** ![bldysabba](https://avatars.discourse-cdn.com/v4/letter/b/ecccb3/32.png) [@bldysabba](https://boards.straightdope.com/u/bldysabba)\ **Post date:** [October 19, 2013, 11:39pm UTC](https://boards.straightdope.com/t/trying-to-understand-the-basics-of-health-insurance/671330/53 "2013-10-19T23:39:47Z")
> [@Si\_Amigo](#): > > It is when you have everyone in the pool. Like pretty much everyone of the nations we compete with economically do. It’s been shown to provide the same or better levels of overall care just about everywhere. Most everyone agrees that the model we had been working under was unsubstanible. > > You know what else everyone hates? Sore losers. If you’re replying to my post, I have no stake in the US healthcare insurance market(apart from the fact that it’s setting a bad example). And it is a fact that if you compel insurance companies to sell ‘insurance’ to people with pre-existing conditions. you shouldn’t refer to it as insurance anymore. It’s like selling accident insurance to the guy with a totaled car outside. For the accident that totaled it. ---
**Author:** ![Si\_Amigo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/si_amigo/32/2877_2.png) [@Si\_Amigo](https://boards.straightdope.com/u/Si_Amigo)\ **Post date:** [October 19, 2013, 11:59pm UTC](https://boards.straightdope.com/t/trying-to-understand-the-basics-of-health-insurance/671330/54 "2013-10-19T23:59:41Z")
Like most states do with car “insurance”? Good drivers and bad have to have insurance and they can shop around for better deals. Just like the ACA does. ---
**Author:** ![Nars\_Glinley](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/nars_glinley/32/8177_2.png) [@Nars\_Glinley](https://boards.straightdope.com/u/Nars_Glinley)\ **Post date:** [October 20, 2013, 12:35am UTC](https://boards.straightdope.com/t/trying-to-understand-the-basics-of-health-insurance/671330/55 "2013-10-20T00:35:34Z")
> [@Si\_Amigo](#): > > Like most states do with car “insurance”? Good drivers and bad have to have insurance and they can shop around for better deals. Just like the ACA does. Except that if you have a wreck, you can’t buy new insurance and have your new carrier cover it. ---
**Author:** ![Si\_Amigo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/si_amigo/32/2877_2.png) [@Si\_Amigo](https://boards.straightdope.com/u/Si_Amigo)\ **Post date:** [October 20, 2013, 1:00am UTC](https://boards.straightdope.com/t/trying-to-understand-the-basics-of-health-insurance/671330/56 "2013-10-20T01:00:07Z")
Bad anology. You can buy new car insurance. The wreck was covered under your old policy. But basically the old way of doing health insurance wasn’t working and was unsustainable so they rewrote the definition of insurance. With a law. That’s the way it happens when you play by the rules. They pass a law to define things. ---
**Author:** ![bldysabba](https://avatars.discourse-cdn.com/v4/letter/b/ecccb3/32.png) [@bldysabba](https://boards.straightdope.com/u/bldysabba)\ **Post date:** [October 20, 2013, 2:22am UTC](https://boards.straightdope.com/t/trying-to-understand-the-basics-of-health-insurance/671330/57 "2013-10-20T02:22:38Z")
> [@Si\_Amigo](#): > > Bad anology. You can buy new car insurance. The wreck was covered under your old policy. Alright. If you can’t understand this one, I’ll give you another one. It’s like trying to buy disaster insurance for your house after a tornado has ripped the roof off. And trying to get them to pay for the roof. ---
**Author:** ![Grim\_Render](https://avatars.discourse-cdn.com/v4/letter/g/a87d85/32.png) [@Grim\_Render](https://boards.straightdope.com/u/Grim_Render)\ **Post date:** [October 20, 2013, 10:30am UTC](https://boards.straightdope.com/t/trying-to-understand-the-basics-of-health-insurance/671330/58 "2013-10-20T10:30:42Z")
> [@bldysabba](#): > > Alright. If you can’t understand this one, I’ll give you another one. It’s like trying to buy disaster insurance for your house after a tornado has ripped the roof off. And trying to get them to pay for the roof. What these examples sharply illustrate is how badly suited the insurance model is to healthcare delivery. This particular problem is sometimes referred to as “the umbrella that melts in the rain” problem. The people most in need of healthcare are the least attractive customers. ---
**Author:** ![Si\_Amigo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/si_amigo/32/2877_2.png) [@Si\_Amigo](https://boards.straightdope.com/u/Si_Amigo)\ **Post date:** [October 20, 2013, 1:45pm UTC](https://boards.straightdope.com/t/trying-to-understand-the-basics-of-health-insurance/671330/59 "2013-10-20T13:45:17Z")
It’s also that most people have trouble understanding a paradigm shift in long standing practices such as healthcare. The analogies they cite are based on applying problems to the old system while not yet understanding (or not wanting to understand) how the new system is being set up to handle things like pre-existing conditions. Is the ARC perfect? No, nothing in life is perfect but that doesn’t mean you don’t face problems and deal with issues when they come up. Playing up the fear card all the time is getting old and not really worth responding to at this point. ---
**Author:** ![foolsguinea](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/foolsguinea/32/14751_2.png) [@foolsguinea](https://boards.straightdope.com/u/foolsguinea)\ **Post date:** [October 20, 2013, 9:39pm UTC](https://boards.straightdope.com/t/trying-to-understand-the-basics-of-health-insurance/671330/60 "2013-10-20T21:39:17Z")
> [@jacobsta811](#): > > Giving more people access to services almost invariably raises the use of those services - so I would bet big, big money that the ACA will increase the use of health services and thus health care costs at least over the short and medium term. > > But that is a stupid way to measure it. You don’t make health care universal because it saves big bucks, you do it because it extends lives and makes your population healthier, and because it can benefit your economy through entrepreneurship (before the ACA, doing a startup as anyone but a straight out of college kid was an insane risk, especially if you ever had any health issue at all ever). +1 Socialized medicine would be even better. [Previous page](https://boards.straightdope.com/t/trying-to-understand-the-basics-of-health-insurance/671330.md?page=2) [Next page](https://boards.straightdope.com/t/trying-to-understand-the-basics-of-health-insurance/671330.md?page=4)