Not just insurers, but big hospitals and provider networks, too.
Only if you deny free will and assume perfect information and deterministic laws of physics, can every risk resolve to either 0% or 100%.
If there were 100% prediction capability, there would be no risk to smooth, and there would be no reason to buy insurance, because the insurance would be more expensive than paying the costs of the would-be insured risk directly.
Uh, I guess this question might be interesting from an academic perspective, but not a practical one. There's no risk out there which can be predicted with 35 nines of precision, let alone one that people are interested in insuring. And certainly not one in which the overhead of providing services wouldn't inherently dwarf any benefits to both parties.
Or rather, insurers like to take all of the pros of being an insurer, and none of the cons.
Risk pool didn't change by your entry into it? So what, if there's something deniable, we will. Etc, etc.
Whatever your politics on healthcare, it does seem insane that something as routine as visiting the doctor for a yearly physical could be so expensive that you need insurance to pay for it. Like you said, insurance should be to cover unpredictable catastrophic events. My homeowners insurance doesn't pay for roof maintenance until the old one fails. My car insurance doesn't pay for car maintenance until I've had a collision. Why is my health insurance covering routine maintenance?
Because the preventative care reduces the costs down the line, and there is no way for an insurer to check if people are actually doing their routine maintenance if they don't do it. So it's better to include it in the premium. It's different from your roof in that your HO insurance only covers freak accidents (not failure because of old age), whereas health insurance covers many old age related problems.
This is a common myth. Preventive care actually doesn't reduce costs, on net. It improves the overall quality of care, yes, but it doesn't (in aggregate) save more money than it requires.
For some conditions, early intervention is cheaper (and more effective) than delayed intervention, but that's not always the case - and either way, it's not considered preventive care.
In many states in the US, there actually are checks done for these things to make sure the car has had its routine maintenance performed... but they're not done by the insurance company. They're done by the government.
There are a whole lot of things that you can do to reduce your premiums for car insurance, homeowners' insurance, renters' insurance, and so forth. Those are determined by the insurance company, not by the government.
I thought the evidence was that preventive care increases total lifetime care costs, but improves outcomes [0]. (Whereas, e.g., smoking reduces lifetime, though not per-year, healthcare costs, but made outcomes worse.)
[0] Which may still save your insurer money if it kicks costs down the road until your costs are covered, or at least subsidized, by Medicare. (Or change plans because of a different job, or otherwise are someone else's problem.) And even if it doesn't save the insurer payouts, it can make the insurer more money by keeping you alive, employed, and paying premiums longer—obviously, premiums are set so that on average the insurer makes money every year you are paying them, so if you are covered longer even if they are paying more bills on total, they are still making more money.
You can buy prepaid maintenance plans for cars, they are just usually bundled with auto purchase rather than bundled with liability insurance the way some other coverage is; that's just a packaging detail, and there isn't a purchase-of-your-body to bundle maintenance plans s with.
I’m relying on insurance because going to the doctor is such a financially risky gamble.
This is what's really strange about the American healthcare system. For everything else in America you can either get a price up front or an estimate of total costs up front. Why should going to the doctor be any different than going to a mechanic? Pay advertised flat rates for issue diagnosis, and get estimates for the problem.
Yes, in cases of emergency you can't really shop around too much, but the majority of the time you're going to a doctor, you could at least call and get estimates of how much things will cost. It's not even possible to do this with most healthcare organizations. If you call your doctor's reception and ask "how much will it cost for this visit?" they'll tell you they don't do billing and they won't know until it's processed by insurance.
Price transparency in the healthcare market - or at least some decent estimate of it - would be a great thing to see. American healthcare is ridiculously inefficient because it appears wholly designed to be byzantine.
For the parts of the country that are rabidly anti-universal healthcare, a more free market solution would be a nice consolation prize.
A large portion of the country working full time already has their employer offered health plans supplemented by Medicaid anyways.
I think that working class people in these regions wouldn’t be adverse to Medicare being expanded to include them. I’m sure the Republican Party base of upper middle income and wealthy whites would be, but again, not so much everyone else there. It’s a matter of how and what constituencies you recruit and activate.
It’s so strange, the people who would most benefit from universal healthcare (and those that currently do, like Medicare beneficiaries) tend to be the strongest objectors to it, citing hard-to-understand ideological reasons.
It's not so strange if you allow yourself to question the assumption that they'd benefit from it in the first place.
Medicare is a great example. Patients can opt to receive their Medicare inpatient and outpatient coverage through a private plan instead of through the government-managed plan. Since this program was introduced, it's gained popularity rapidly, over a third of Medicare beneficiaries receive their benefits from private plans. Many private plans are the same price as Medicare or cheaper.
From the data, the private plans beat government-managed plans on the three major metrics: medical outcomes, cost, and patient satisfaction. On the last one, the difference isn't even close: the worst of the major private plans (by patient satisfaction scores) still manages higher scores than Original Medicare does.
People who haven't ever dealt with Medicare themselves directly (which includes most HN commenters) find this hard to understand, but it really isn't: dealing with Medicare is awful. I could give you my personal anecdotes, but they'd overfill the comment length on HN, and again, at the end of the day, the numbers speak for themselves. Medicare beneficiaries themselves are turning to private plans to replace their government-managed plans, so it's really not surprising if they're not the biggest advocates of expanding government-managed plans.
No, they're much more than that.
> And their existence and popularity has more to do with their sponsorship by insurance funded politicians than anything else.
The programs are cheaper, provide better medical outcomes, and patients prefer them.
That doesn't mean they're perfect, but you have to bend over pretty far backwards to say that they're inferior and only popular because of "insurance-funded politicians".
> Dealing with these administrators isn't generally better or worse than dealing with the government directly. Exceptions exist, but that goes without saying.
It is monumentally easier to deal with private insurers than to deal with an Original Medicare plan.
It’s a corporate-controlled media narrative that these things are unpopular.
http://www.businessinsider.com/poll-medicare-for-all-public-...
It gets worse. Each entity in the system applies their own rules. eg a friend had an eye exam at the doctors and they took 11 months to bill[0]. The doctor group pointed out their small print says they have 12 months to bill. The insurance company had a shorter time frame and refused to pay. But it was a scam - the doctor had changed the diagnosis code to get more money, and the insurer would have refused to pay so they kept more money. My friend lost.
It is very easy to see which proposals will "fix" things. Look at which groups make less money due to the fixes (doctors, insurers, medical groups, equipment makers, drug companies etc). It is extremely rare for that to be shown, and all those groups will fight to keep what is "theirs".
> American healthcare is ridiculously inefficient because it appears wholly designed to be byzantine.
I like the word confusopoly https://en.wikipedia.org/wiki/Confusopoly
Confusopoly is an economic and marketing term referring to a purposeful
act by a seller or group of sellers to confuse the buyer in order to ease the sale
That's why I think banning non-catastrophic insurance would be helpful. I'm confident if insurance companies were kicked out of routine healthcare you'd see a very quick shift to price transparency.
There's one doctor here in town that mostly caters to undocumented immigrants and he has a price board in his waiting room for cash price of most of the common services. BCBS (which is 90+% of the insurance market in my state) actively prevents other doctors from doing this. He can only do it because most of his patients don't have insurance.
We visit the clinicas here in L.A. as well, paid $130 for X-rays recently. Reminds me of trips abroad.
That's all I want from health care, simple and transparent.
Totally right. Which means in practice insurance is covering the risk of pricing rather than the risk of you having health issues.
Average people only have one rational response to random prices: don’t go to the doctor voluntarily. But this can cost them their health in some cases.
You mean their life. People actually die without health care. American health care is murdering Americans for profit.
I recall seeing an article that Bezos was going to take on vertically integrated healthcare for his workers. And given Amazon’s history, the next step would be productizing that as a service for all comers with transparent a la carte pricing.
you have discovered their business model.
This is completely backwards.
Insurance is about risk smoothing, across states of the world. Insurance should not have a positive expected value - that is, there should be no person for whom the total lifetime expected payouts exceed the total lifetime expected costs.
For a number of reasons, health insurance isn't actually insurance, and this is one of them. You can identify individuals who are dramatically likely to receive more money in payouts and benefits than they are to pay in their regular premiums, which means you're talking about a redistribution system, not an insurance system.
The more finely the chance it'll be needeed is known, the more closely individual prices will match the probability, and thus less smoothing will take place.
That's a common refrain, but it's wrong and misleading. It's why people talk about young and healthy people being "necessary" to balance out the costs of the older and sick under the ACA. That's describing a redistribution scheme, not insurance.
> But the insurance also has price proportionate to the chance she will need it.
No, they don't. They price based on age, sex, zipcode, income, and smoking status. That's only very loosely related to the chance that she will need it. It's nowhere near enough to provide precise pricing.
> The more finely the chance it'll be needeed is known, the more closely individual prices will match the probability, and thus less smoothing will take place.
No, that's another common misconception. The price is not determined by the ability of the insurer to predict the probability of the risk; that's what determines the insurer's profit margins. Under a free insurance market, the price is determined by the relative demand and supply of patients and insurers.
If by "manage care and costs", you mean kick people off insurance and deny claims, then sure.
The prohibition of pre-existing condition exclusion and the associated practice of rescission in the ACA largely ended the “kick people off insurance” practice (and the limitation of profits to a percentage of actual paid bills eliminates some of the incentive on the other), though the current Administration’s drive to reverse those policies combined with the way the industry is vacuuming up personal data could make them return with a vengeance.
The ACA prohibits denying coverage or charging additional premiums based on, or limiting in any way coverage for services because they are related to, pre-existing conditions.
(Now, within the existing state and federal rules on minimal coverage, insurers may limit coverage for particular conditions, but can't differentiate based on whether they were present before the person sought coverage.)
The real big deal, though, is the linked prohibition on rescission: before the ACA, insurance companies would frequently do focused investigations to find evidence of non-disclosure pre-existing conditions, however minor and unrelated to the current condition, when an insured person incurred high covered expenses, then use any discovered pre-existing condition as an excuse to retroactively cancel their insurance avoiding the high pending bills and dumping them on the patient.
20 Republican states are suing to remove it arguing it unconstitutional and the Republican party gutted the penalty for not having insurance it was tied to. The Republican Party President, Donald J Trump, argues this mandate is inseparable from the entirety of the ACA. The Republican controlled Judicial Branch politically favors of the Republican Party.