Is Health Insurance Even Worth It Anymore?

How can I start an insurance company?

A family member has a rare disease and I've gone through the details of the various treatments, how many people are involved in ongoing care and treatment etc. It's a lot of very well trained people spending a lot of time. A concrete treatment example - the process to create some blood plasma treatments is very complex, expensive etc. In the end, it will be millions of dollars of real underlying costs.

There is probably no cheap solution. Maybe GLP-1 type magic can put a real dent in the overall cost, but there will always be a desire to save people's lives even if the cost is very high.

Now it is a system that ONLY the unhealthy benefit from. Everyone else pays for extremely bad choices.

Now you have to account for taxes you pay in the U.S. for medicare, and a risk-adjusted share of the deductible payments, but overall it doesn't seem that crazy.

You are not paying $15k to hedge against someone in your family getting cancer in a calendar year.

You are paying $15k to pay for old and sick people’s routine healthcare, due to the ACA’s requirement that the highest premium to be at most 3x the lowest premium, and the requirement that premiums be only a function of age and tobacco use (i.e. no underwriting for health risks by factoring in pre existing conditions).

So an ACA compliant health plan’s premiums are far more comparable to a tax than an insurance premium since they are explicitly a wealth transfer mechanism from young and healthy to old and sick.

New York state takes this wealth transfer even further and mandates that age not be used at all to price premiums. I think Massachusetts only allows an age rating factor of 2.

It drove her to bankruptcy anyway. In hindsight, she commented that had she known that the insurance wouldn't be all that helpful, she would have just saved up all the money she poured into premiums over the decades.

Destroyed my entire trajectory in life.

The prior system was mega fucked, our current system is still fucked.

If you had a congenital condition prior to the ACA you were a wage slave once you hit 18, no private insurance and couldn't get public. Literally founded a successful startup the minute I got ACA.

Over 40+ years I've seen nearly every profession go through a bubble and lean years, lawyers, mechanics, academics.

But never doctors, in retrospect I should have joined that protectionist racket, but my family couldn't afford to let me at the time.

[0]: https://www.startribune.com/unitedhealthcare-part-of-95m-set...

[1]: https://www.propublica.org/article/unitedhealth-healthcare-i...

I'd like to see health insurance act like insurance again though. Right now it covers absolutely everything, meaning it's more like pre-payment for routine care + insurance.

Insurance isn't for routine, predictable, or low-cost expenses. But we've mandated that our health insurance cover all of those things.

The comparison to car insurance is overused, but it's a good one. Catastrophic coverage + dedicated savings with lower premiums looks more attractive to a lot more people.

The system we have here forces people to wait until minor issues turn into life or death situations that require much more intensive and expensive care.

DPC is terrific if you have an option near you! Paired with catastrophic insurance, it's a great bet for relatively healthy people.

The DPC Alliance map is well worth a visit: https://mapper.dpcfrontier.com/

And I wrote about DPC a while back: https://church.substack.com/p/direct-primary-care

If I take the low deductible plan with the higher Max OOP I am actually spending less on a yearly basis because the insurance kicks in immediately.

Of course, when something catastropic happens, like cancer, yea, the high-deductible plan would've been better, but that (knocks on wood) doesn't happen every year.

Try to get assets into bankruptcy protected holdings when possible (401k, house, etc, depending on state of residence), so you have more flexibility post bankruptcy.

There may be something less extreme, but leaving the US is one way out of that mess.

The issue is that primary care is not generally expensive, and also not generally needed if you're healthy. I've gone to a PCP less than half-dozen times in my 56 years. So the $100/mo is a waste in my case -- I save much more by just paying out of pocket if every I need to go.

But medical expenses for unexpected conditions -- surgeries, specialized tests, visits with specialized doctors, non-routine medications -- those are all what cost a lot. And that's not covered by $100/month.

So DPC is a nice idea, but it doesn't really replace health insurance -- I look at it more as an "extra" for regular health monitoring and preventative care, which is important in itself (and in most cases worth the $100/month).

The many countries that don't have this healthcare issue do not seem to be producing a notable excess of incredible founders or companies.

Big picture: As a society we are failing to make investments in population health that would pay off and an industry exists in a position that it is directly antagonistic to social good. Medical bankruptcies when an under-insured person has a catastrophe is a failure. A person avoiding preventative or corrective care that will improve their future because in the present they need to pay rent instead is a failure. The market dynamic on private insurance creates pressures that produce these failures as a matter of course. Maybe single-state-payer isn't a perfect way to do this (I am pro-social but also a minarchist), but the private insurance model is obviously worse, and there's probably some solution to the holistic problem but we're incredibly bad at whole-system and whole-population thinking, accounting for "undesirables", and probability around unlikely catastrophe, (and propagandized into being even worse at these things than human psychology alone would allow) so any solution which is optimal is likely to be incredibly unpopular because at the individual optimistic case level it'll feel like it's "infantilizing" people or creating individual disincentives for "repsonsibility" or whatever, and that's before we get to the part where we have large populations of people who are so comfortable with hierarchical systems of exploitation that they are afraid improving things substantially means their currently-comfortable above-water status in the pile of drowning rats might be threatened.

What didn't hold up was not our insurance but my employer, who found a sneaky way to get rid of me and not have to deal with an employee who needed to dip out for his wife's numerous medical appointments.

You might end up with Crohn's or all manner of autoimmune conditions where patented biologics easily costs north of $100k US a year just in medication, but your quality of life if you find a medication that works is not particularly degraded from the average person.

CrossFit will not prevent you from getting into that situation, and I think it would be a vast overreaction to commit suicide in response to such a diagnosis.

There’s nothing, absolutely nothing that as an immigrant I loathe more in the United States than the healthcare system. It is disgusting. The mediocrity of the average doctor combined with how much they charge for that mediocrity blows my mind every time life forces me into their wretched cabinets.

What they would defend is the premise of returning value to shareholders. And of course, that's what most for-profit healthcare and insurance companies are set up to do. The largest shareholders are typically retirement and pension funds.

That can be applied to almost anything, of course, but if you look at the "enshittification" of most markets in the United States, you'll notice that the process began in earnest around the time that the Baby Boomers began to retire. The Boomers, mathematically speaking, did not have enough children to sustain increasing returns on investments through market expansion. When you have fewer people to extract wealth from, you have to extract more from the average person in order to keep up the numbers, and that's ultimately what we see here and across many sectors of the US economy. You have a generation that was told they would have as good of a retirement as their parents' generation, while also being told that they didn't need to produce the human capital in order for that retirement to happen with the same margins as before.

The effect is a generation that gets their basic healthcare met by the taxpayer through Medicare, while getting their retirement checks paid for by their children being squeezed on everything from real estate to healthcare to transportation costs. It's the tyranny of the gerontocracy.

https://news.northeastern.edu/2024/12/10/luigi-mangione-unit...

I tried going without when I switched jobs to an employer that doesn't offer it, but one cleaning as a "cash payer" cost more than the annual premiums to buy insurance privately.

The actual effect has been... mixed. IIUC, the hospitals mostly haven't complied with the order, or they're maliciously complying while trying to keep their real rates secret.

[0]: https://www.cms.gov/priorities/key-initiatives/hospital-pric...

IMHO, if you look at European tax rates vs benefits, and US tax rates vs benefits; US taxes simply aren't efficient, our rates are a little lower and our benefits are a lot lower. Healthcare costs could be significantly reduced if the whole thing were managed as a whole. Do we really need every medical office to have an insurance billing expert whose only job is to interface between the chart and the various insurance rules? OTOH, if you cut out 10% of the cost, healthcare is still expensive, and insurance billing coders and the people who work the other side of that would all be out of work.

Managing healthcare as a whole, you'd be able to do systemwide interventions like increasing residency spots to increase supply of Doctors, and set standards for what care can be delivered by Nurse Practitioners to balance demand against supply.

OTOH, you'd have people complaining that life clocks are a lie, and carousel is a lie and that there is no renewal.

I hope it’s obvious that this is a false dichotomy.

There are many ways to have affordable health care that don’t involve “50% income tax, 20% sales tax”.

There is very good healthcare in places that don’t have those conditions. It’s not hard to find.

In the US, in most cases, incentives for the insurance companies and the insured are not aligned. Ditto for hospitals and patients. These are two very obvious systemic flaws in the US system that, if addressed in a constructive way, could have a significant impact on healthcare affordability.

And if the pre-ACA preexisting condition thing comes back, she might be waiting much, much longer.

I'm not saying some these drugs don't work astonishingly well and for some people they are a miracle/lifesaving treatment but still. Drugs that are in excess of a thousand dollars a pill out of pocket blows my mind.

[0]: https://www.commonwealthfund.org/publications/issue-briefs/2...

Going back to a pre-ACA system won't lower premiums that much. Medical costs have risen in the last decade, same as any other goods or services, and the way US healthcare is structured, with hospital and doctors negotiating with a profit driven middleman (insurance companies) makes it almost impossible to change the rising premiums.

US healthcare will continue to be a mess until there's a universal healthcare system or single payer system similar to any other developed country on earth.