alt Hacker NewsAmerican health insurance is insurance in name only - picture health insurance models laid on top of your car:
Imagine your car gets totaled. Your insurer says, "Hey, we're going to pay out $25K for your vehicle. So you have a $1,000 deductible, so that's $24,000, and then your copay for a total loss is $2,000, so that brings us down to $22,000. For total losses, your coinsurance as your contribution for your vehicle coverage is 20%, which is $5,000, so here's a check for $17,000. But that's only if you're buying a Hyundai, otherwise the vehicle is out of network and you'll get a check for $8,500 instead."
> If you read the fine print of a health "insurance" plan at a large company, you might discover healthcare costs are directly covered by the employer and the insurance company just administers the plan according to "set rules".
Generally this is done by a TPA (third party administrator). In many ways you can do as you wish, but as insurers have already done the actuarial work, it's generally easier to use a plan and tweak it if desired (like "Give us this plan but pay for 1 massage/week") versus having to figure that out yourself.
> American health insurance is insurance in name only - picture health insurance models laid on top of your car:
Health insurance is more insurance than car insurance in the US. There is a legal out of pocket maximum of $17k or so, and networks don’t matter for emergency situations. In fact, people get millions of dollars of healthcare from health insurance whereas auto insurance provides a maximum of $500k after which you have to use umbrella insurance.
Health insurance premiums are not insurance premiums, because legally, health insurance sellers cannot underwrite the health risks. Legally, young and healthy people have to subsidize old and sick, via age rating factor caps (3x and even 1x in NY and 2x in MA), and not being able to price pre existing conditions.
Which means health insurance premiums are mostly a tax if you are healthy and less than 50 years old or so, especially if you don’t plan on giving birth that year.
Auto insurance premiums are insurance, because the insurer is pricing your risk of loss, based on your driving history/driving distance/location/etc.