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Comment by rtb | Hacker News Reader

(As a brit) I don't understand this:

"Molly was employed at the small NPO Knowbility as the Open Web Evangelist. Knowbility was able to put her on Family and Medical Leave which allowed Molly to retain her health insurance coverage. The FMLA time period has ended and the only coverage available now is through COBRA."

So she had health insurance, but now that she's ill and has to stop work, it is stopping? If health insurance doesn't help you when you are sick, when does it help you?

Thank god (and the Labour party) for the NHS.

View on HN

http://www.businessweek.com/bwdaily/dnflash/content/jun2009/...

> Medical problems caused 62% of all personal bankruptcies filed in the U.S. in 2007, according to a study by Harvard researchers. And in a finding that surprised even the researchers, 78% of those filers had medical insurance at the start of their illness, including 60.3% who had private coverage, not Medicare or Medicaid.

EDIT: Insurance is a scam and insurers are evil.

Only if you use a very lax definition of "caused"...more like "possibly contributed to".

See http://www.theatlantic.com/business/archive/2009/06/elizabet...

and

http://www.theatlantic.com/business/archive/2010/07/consider...

How is insurance a scam? You are lowering the impact an extreme event has on you in return for the payment of monthly amount.

The scam is that they are skilled at not paying out when you need them.

That's because the system is setup so that the payouts go from a pool of money that would otherwise be "profit" for the company. If the company's "profit" is independent of the payouts, maybe this would help. Probably have a separate pool of the money from where to settle claims. You could split up the premium into two parts:

1) The money for the payout pool. No profit should be extracted from here.

2) Money that you will invest and thus earn profit from.

You could use actuarial science to make sure that you have enough collections to statistically be able to pay out every claim. And in this model, the company would have no incentive to NOT payout

Insurance is a scam because insurance companies sell products with simple, big, headlines but complex fine print. They go to extreme measures to avoid paying out if possible.

If this were actually true then word would get around quickly and insurance companies would lose business as honest rivals emerge. (Hint: This hasn't happened. Because it's not true.)

See, from a cancer patient writing three days ago who had her insurance canceled because of Obamacare:

http://online.wsj.com/news/articles/SB1000142405270230452750... "The second element essential to my fight is a United Healthcare PPO (preferred provider organization) health-insurance policy. Since March 2007 United Healthcare has paid $1.2 million to help keep me alive, and it has never once questioned any treatment or procedure recommended by my medical team. The company pays a fair price to the doctors and hospitals, on time, and is responsive to the emergency treatment requirements of late-stage cancer. Its caring people in the claims office have been readily available to talk to me and my providers."

It's true and they all do it. Usually under the guise of "preauthorization."

> then word would get around quickly and insurance companies would lose business as honest rivals emerge.

I can never tell if someone actually believes the free market opinion they give, or if they're parodying stuff other people say.

People buy insurance by price. Insurers cut price by not paying out.

People buy life insurance based on price. Whether you're alive or dead isn't generally difficult to establish.

People buy other types of insurance based in part on price and in part on reputation. There are plenty of discussions (I've participated in some) about how insurance company X is too difficult to deal with, and insurance company Y is better when your car is totaled, etc.

That's the point. An extreme event will be something that puts you out of work for at least a month, and for many people, they will no longer have a job after not working for a month. Since their insurance is coupled in intricate ways with their job, it ends when they need it most.

Right but that has no bearing on if the concept of insurance is a scam or not. Sure, health insurance in this country is tied to a job due to WW2 wage controls but that doesn't invalidate the entire concept of insurance.

Does it really matter if the pure concept of something is not a scam when the embodied culture of it clearly is?

Its a con, not a scam. If that matters. But then again, a con is but a technique to scam someone. So, by this logic...

Mafia: Pay us, or else something bad will happen and you will not survive it.

Insurance: Pay us, or else WHEN something bad happens, you will not survive it.

Understand the nature of the con now? Industrialized medicine never has the individuals' best needs in mind.

I don't think DanBC is saying that insurance per se is a scam, but that the U.S. health insurance industry is unavoidably scammy.

EDIT: Put another way: you're 100% correct that that's what insurance should do and purports to do, but that's not how it actually plays out with American health insurance.

No! I'm very much saying that most insurance (car insurance, home contents insurance, payer-protection insurance, flood protection insurance, etc etc) is rife with scammy practices and awful awful people - the scum of the earth.

Agreed. On the scale of insurers, there's no risk - it's just cost averaging a.k.a. what the government should be doing. There's no way to lose money at it.

Sure, but that's different than saying insurance is by-definition a scam.

How is insurance a scam?

Insurance is a bet and for an insurer to make money you have to bet that your luck is going to be considerably worse than the average.

People should just get together in large groups and pool their money, it would be much cheaper.

Isn't that why most insurance companies used to be mutual co-ops and only recently have become corporations? Essentially there are insurance companies that are exactly what you describe, people in a large group pooling their money.

>People should just get together in large groups and pool their money, it would be much cheaper.

http://en.wikipedia.org/wiki/Takaful

No, they didn't. The number of medical bankruptcies is:

    # Medical bankruptcies = # bankruptcies x [P(bankruptcy | medical event) - P(bankruptcy | no medical event)] x P(medical event)

The study in question merely measured P(medical event | bankruptcy), which is what that 62% number represents.

The verbiage of the study and press release confused a bunch of innumerate reporters, but HN is smarter than that.

Isn't this country crazy?

If you watch our politics (please spare yourself) you could have seen a packed convention center for one of our two major political parties a few years ago cheering the idea that we should let people get ill and die if they could not afford to treat themselves. This is not an exaggeration, I am sure it is on youtube somewhere. [1]

Oh and serving in the military means your claim request will be backlogged for a year, so that doesn't mean you are safe either.

[1] google "let him die"

> "cheering the idea that we should let people get ill and die if they could not afford to treat themselves"

For an extra level of sadness, said candidates were simultaneously criticizing other countries for allegedly letting people die unnecessarily (see: "death panels").

The standard in the US is that this is a different type of insurance (disability insurance) and it's often sold in parallel with life insurance.

Disability benefits can also (often) become available in this situation, meaning that this is one of the only situations in which the fed will actually give you money (most other benefits are paid out by the state).

Not saying that this is a good situation, just clearing up some misconceptions.

Specifically, there are both short-term and long-term disability insurances. Both pay some percentage of your base pay (often 60%-80%, or even 100% for short-term) at the time of the qualifying event. Short-term kicks in first, but eventually runs out and the long-term insurance kicks in. Long-term insurance often covers the individual to retirement age.

Take it from me, you really want to make sure you've got both, because shit happens.

Noted spastic blabbermouth Jim Cramer makes a point of this in his books. He more or less calls disability insurance the most important financial product that people can buy.

The thing that's really weird to me as an generic continental European is that there are bounds to medical leave, when an employee gets sick around here there is some sort of fund that kicks in and the person retains pay and benefits for as long as she's out of work.

It's not just about universal healthcare it's also about not losing your salary if you are sick for a couple of months (or losing your holidays if you are sick for a couple of weeks).

The standard response is that she needed disability insurance on top of her medical insurance. So yeah, you need 2 different insurances in case you get a real illness in the US. This is how fucked up it is here. Unfortunately the GOP and conservative democrats killed any "public option" in the ACA so we'll never have anything like the NHS here.

Oh, I have this secondary insurance. It also sucks and will cost me a lot of money to take care of myself if I ever get as sick as Molly. I might have a chance of not losing my house with this insurance.

That's on top of student loans you're paying off and other things Europeans don't have to worry about, but according to HN libertarians its all "welfare nanny state statism" and somehow Ron and Rand Paul would fix everything if we could just make them dictators for life.

"Unfortunately the GOP and conservative democrats killed any "public option" in the ACA so we'll never have anything like the NHS here."

Hardly a permanent situation. When you have a corrupt enough system, just like a scrambled enough computer, the best bet is to hurry up and reboot the system so you can bring it up clean. After the reboot we'll have sensible insurance. The problem is surviving until after the reboot. There is too much money to be made by crooks so we have to nurse the existing system along until enough blood has been squeezed from stones.

You're much more optimistic than me. I could see, maybe, my grandkids ushering in something like the NHS, but now or in the near future? Where the political discourse is split between being Eisenhower style Republicans (democrats) and some insane fascist theocracy (Republicans/Tea party)? Yeah, this not the formula for progressive politics.

Part of the confusion is that "health insurance" isn't so much insurance any more but part payment gateway, part tax deduction system and part salary augmentation.

It's better to say she lost her health care when she lost the ability to keep paying for it. The real insurance is called disability insurance now.

Health Insurance isn't actually designed in the US to benefit the individual. Its defined to benefit those who sell health insurance.

If you can't pay: you die. That is an axiom of the entire insurance industry.

I stopped paying my health insurance once and I didn't die.

Perhaps you mean if you don't pay for health insurance you are more likely to declare bankruptcy as a result of an unexpected healthcare issue however to equate declaring bankruptcy with death is a bit extreme imo.

You're healthy, you don't have any life-critical problems at the moment. You don't need insurance.

But when you do need it - if you have an accident, get cancer, or otherwise ill - and you don't have it: well, no medicine for you. Go die in the streets.

And before you say this is an extreme position, no. I have worked with homeless and despondent people in America, on the streets, and time and again encountered people who simply didn't have the money for the treatment they needed, so they were on the streets. Dying of cancer. All over America.

I don't know which Labour party you're talking about.

http://en.wikipedia.org/wiki/History_of_the_National_Health_...

(The one before New Labour!)

The one that appointed Aneurin Bevan as Minister of Health.

https://en.wikipedia.org/wiki/Aneurin_Bevan

Attlee's Labour.

Thank Thatcher we have a country that can afford to pay for the NHS.

Can we not turn this into some political shitfest please. Have some respect.

But..but... he started it.

On a serious note, I wish Molly all the best.

(Sorry, that Labour aside does seem like a bit of a derail. I didn't intend it as such.)

Because the economy that Thatcher and Blair made is going so well? Triple-dip?