Background: In light of increasing health care costs, my company is closing out our health insurance policy. Everyone will be compensated on their salary for the additional cost that their health insurance coverage would have otherwise cost the company's bottom line. A friend and I were driving to Charlotte today, about two hours away. We are both casual gamblers so we began discussing health insurance in general from the terms of a gambler.
We know that insurance companies make slews of money. So that must mean there is a significant "house edge" factored into your insurance premiums to cover the cost of doing business and provide them with profits.
What do you guys think? Are you at advantage to simply take a similar wage deduction, place it into an account that draws interest and then pay any medical costs off of that amount? Obviously some people will get cancer, have a heart attack or other expensive procedure that will, in gambling terms, bust them out, but what are the odds? Is it safe to say we're playing a game with our insurance company that we can't win?
I'd love to hear some other perspectives on this from some of you mathematically inclined or what you guys think about our insurance problems the way they are today. Let's assume this is from the perspective of someone who makes enough money to not qualify for a government subsidy or Obamacare, etc., someone that would need to purchase private health insurance for in the range of $200-400 a month.
So should we encourage/permit gambling with life??????
Quote: jsausley
someone that would need to purchase private health insurance for in the range of $200-400 a month.
I assume this is a joke! Good luck in finding real health insurance, unsubsidized, for that!
Anyway, you need not just focus on health insurance....
Same conversation for auto insurance, homeowners insurance, disability insurance, life insurance, and well.... even blackjack 'insurance'!!!!!
The answer to your question is simple. The great majority of people lose out by having health insurance, but the few that end up needing anything major most likely would be bankrupt if they didn't have health insurance. If you are worth close to nothing, it is probably not the worst idea not to have health insurance, but once you've started to accumulate some wealth to me it is way too risky not have health insurance.
Actually your question is one many people are wrestling with regarding the various aspects of health insurance, long term care, etc. The parameters of your current age and health surely must enter into it, but essentially with any insurance you are betting you will, they are betting you won't. You must weigh the ability to afford insurance, afford to bust out, free roll, whatever.
Quote: jsausleyFirst off, I hope this is the most applicable forum section for this topic.
if it's about gambling it can go here! You're good.
I pay for health insurance and I feel like an idiot, and I am over 60. As long as you cannot be denied coverage for a previous condition, it seems to me well worth the risk of the initial setback. Kind of like being able to wait until you get a fender-bender, then buying insurance, and turning the cost of the fender-bender fix over to that insurance.
Well, it's not exactly the same; I expect your initial medical costs never get reimbursed, but if they are truly oppressive, you can take them off your taxes. Unless they start making the penalty bigger, it seems like a really bad bet.
Quote: SOOPOOI assume this is a joke! Good luck in finding real health insurance, unsubsidized, for that!
Sorry, forgot to mention that I'm both young and single. You're right, it's a lot more for anyone 40+ or married.
For example; I've always been healthy, but in 2004 (at age 45) I had an idiopathic optic neuritis. I went from an ophthalmologist to a retinal specialist to a neurologist, got an MRI and several other specialized tests along the way (I had woken up partially blind in one eye), to my first hospital admittance, all in about 24 hours. I was 3 days in the hospital, getting steroids and insulin to counteract the steroid side-effects. Without that aggressive treatment, the damage (blindness) would have been permanent. I would have lost my job (and my health insurance) as a result. The billing: $68,000. My out-of-pocket expense: $135, including co-pays and prescriptions.
The second time I was ever in the hospital was in 2010. I tripped and fell, tried to catch myself, and crushed my elbow. It was so bad they were considering amputation. 2 titanium plates and 18 screws later, 6 months of 3-a-week therapy, and weekly x-rays and surgeon (ortho) follow-ups for 3 months, I had better than 95% of the use of my hand and arm back. Billing: $80,000. My cost (co-pay for all therapy and appointments, and some to the hospital): $3200. Please note: I broke my arm in a dark parking lot, and it cost 80K to make it right.
Either one of those events would have wiped out my savings, my house equity, and every dime on every credit card I had available at the time. And both were CHEAP compared to things that happen to people every day. Notice also that just those 2 events, had I put my money into savings over that 29 years instead, would have wiped out every dime of it.
You're kidding yourself if you think you can get through any need for medical attention without insurance. Or that you don't need it while you're young. It will ruin you financially. And the premiums are tax deductible.
We call that life experience. You know when you encounter it. Remember, better be safe than sorry.Quote: beachbumbabsSpeaking from my perspective (I'm a very lucky person, in that I've had great health insurance for 29 years now, and it's a lifetime benefit, though I pay almost 200/month to keep it), I think it has to be purchased. I would not qualify for subsidies, either.
For example; I've always been healthy, but in 2004 (at age 45) I had an idiopathic optic neuritis. I went from an ophthalmologist to a retinal specialist to a neurologist, got an MRI and several other specialized tests along the way (I had woken up partially blind in one eye), to my first hospital admittance, all in about 24 hours. I was 3 days in the hospital, getting steroids and insulin to counteract the steroid side-effects. Without that aggressive treatment, the damage (blindness) would have been permanent. I would have lost my job (and my health insurance) as a result. The billing: $68,000. My out-of-pocket expense: $135, including co-pays and prescriptions.
The second time I was ever in the hospital was in 2010. I tripped and fell, tried to catch myself, and crushed my elbow. It was so bad they were considering amputation. 2 titanium plates and 18 screws later, 6 months of 3-a-week therapy, and weekly x-rays and surgeon (ortho) follow-ups for 3 months, I had better than 95% of the use of my hand and arm back. Billing: $80,000. My cost (co-pay for all therapy and appointments, and some to the hospital): $3200. Please note: I broke my arm in a dark parking lot, and it cost 80K to make it right.
Either one of those events would have wiped out my savings, my house equity, and every dime on every credit card I had available at the time. And both were CHEAP compared to things that happen to people every day. Notice also that just those 2 events, had I put my money into savings over that 29 years instead, would have wiped out every dime of it.
You're kidding yourself if you think you can get through any need for medical attention without insurance. Or that you don't need it while you're young. It will ruin you financially. And the premiums are tax deductible.
Quote: jsausleySorry, forgot to mention that I'm both young and single. You're right, it's a lot more for anyone 40+ or married.
Especially if you opt for a high-deductible plan. Although, thanks to Mr. Obama, the really high-deductible plans (like $10K+) are no longer being offered. These plans actually make sense for young, healthy people who have a decent amount of savings.
But, aside from that detail, I agree with the majority that you should have it. In general I hate insurance as it is the same thing is gambling, and just like casino gambling, the other side has the advantage. I never carried renter's insurance until I got married, and I lost that battle with the new wife...(it's a small amount per year). For car insurance I usually carry the state-mandated minimum coverage and eschew collision/comprehensive, as I could replace my car brand new if the very unlikely occurrence of a total happened.
However, with health insurance, if you lose, you lose BIG. A life-changing event could bankrupt you. I tore my ACL last year and with my company's decent/kind of crappy health insurance I was out around $4-5K out-of-pocket counting the initial appointment, MRI, surgery, and all of the follow up appointments and physical therapy. I don't think I added up the "sticker price" of the whole thing, but it would have been in the $30-50K range. That would have had been bad. And that's a relatively minor operation on the scale of medical procedures.
You should have health insurance.
Nope, this is DT stuff for sure.
>Background: In light of increasing health care costs, my company is closing out our health insurance policy.
Not necessarily a bad corporate decision. Look at Detroit.
>Everyone will be compensated on their salary for the additional cost that their health insurance coverage would have otherwise cost
>the company's bottom line.
In other words, each will get what would have been paid in premiums , but coverage is "cafeteria plan" of individual entres,
such as "pregnancy coverage" rather than one category such as "health care".
>We are both casual gamblers so we began discussing health insurance in general from the terms of a gambler.
Not a bad idea for any political activity.
>We know that insurance companies make slews of money.
Sure do.
> So that must mean there is a significant "house edge" factored into your insurance premiums
Sure is, and the industry is composed of various segments each with their own house edge.
>to cover the cost of doing business and provide them with profits.
"Costs" "Profits".... man that is like saying "water rights" in the old west: fighting words.
Ever been given a small package of hand tissues (Kleenex) ... that item 'costs' 200.00. Profits are built in too based on theoretical incentives toward capitalism and knowledge and Living Happily Ever After.
>What do you guys think?
Whatever the Wizard tells me to.
> Are you at advantage to simply take a similar wage deduction, place it into an account that draws interest
>and then pay any medical costs off of that amount?
Heck no, 'cause then you ain't got no Rabbi (NYC Cop Talk) In Vegas, it would "You Got No Juice".
You see, with no juice, you get different products. Control over patient flow is the key... join this plan or that plan and you will get some type of medicine but join nothing and its like having no juice, you ain't gonna get hired in a casino with no juice.
Plan A can get you something and Plan B can get you something but plan Independent can't get you nuttin'. Cause ultimately its the Plan's Juice Pullers that get you anything. You sittin' in the waiting room with a tree limb through your chest, Plan A might get you something good across town, Plan B might get you something good right there, but an Independent Plan will get you a nurse typing: S P L I N T E R.
>Obviously some people will get cancer, have a heart attack or other expensive procedure .....
Aw, Common...... lets talk 'bout a young broad working out in a gym instead. Much easier on the eyes than cancer.
She is thirty and we can give her some certificate for fresh organic fruits and vegetables each month and also a certificate for a free gym membership for a year. (This will benefit her life. We can also give the men in the gym some contact lenses that will make the young woman's work out clothes secretly appear to be transparent, because real costs are very low). The trouble is that we have to wait 35 years for the fresh fruits to give us ONE woman who will NOT need a breast cancer operation ... that "saving" will only benefit whoever would be her insurer at the time she needed the operation. It won't benefit the insurer who gave her the fruits and vegetables thirty years earlier).
>that will, in gambling terms, bust them out, but what are the odds?
Yipes. No one really knows. Death certificates have little relation to actual cause of death. And ain't no doctor ever gonna say "she failed to eat fruits and vegetables thirty five years ago.
You get a gunshot wound in Boston, you want it to be in a bad neighborhood where you are just one of many that night. If you get shot on the steps of Mass General, ain't nobody there gonna know what to do about a gunshot wound. So you are buying different things with your insurance money. Well, it depends. Water damage after a hurricane might be covered but not if you file it as a flood damage claim. Same thing in medicine. Get something and its spin the wheel. Doctors often engage in Watchful Waiting because its in a low compensation class now but if he gets worse its gonna qualify for dialysis and that is a GRAVY TRAIN. Health care is a big pie and we often waste time on how we slice it up, but each slice has its own lawyers and lobbyists. Hard to negotiate in advance what condition you will have.
>Is it safe to say we're playing a game with our insurance company that we can't win?
Yes. But you don't even know the name of the game you are playing. Woman unpacks crate of porcelain from China. Gets bit by mite from straw. You've heard of unknown motorist insurance... wait till you ask her if she has unknown mite insurance in a town 800 miles from a university. Woman loses use of fingers in lawn mower, ah... now there is a program we can deal with, she has insurance coverage for that.
It's a minor operation that doesn't require any more than an out patient visit and some follow ups.
That suited me just fine, who wants overnight stays that aren't needed
The cost to me was zero, however I don't know what costs the hospital incurred in treating me, and to a excellent standard I should add
The point I'm making is, if it was done under private medical insurance I'm sure the final invoice
to the insurance company would have been padded out with unnecessary additions and be much larger than it needed to be.
Of course you can buy medical insurance in the UK and many employers provide it for their staff even though it's not strictly needed.
Its value is debatable, however if I lived in a country where there was no other option I would definitely buy it.
Examples: extended warranties on electronic failures: common & insignificant.
Damage to car: rare & insignificant
New totalled car: rare & possibly significant
critical illness or death: rare & life-changing.
He argued that you should self-insure almost everything, by saving the premiums on any insurance purchase you would have made, or taking the highest deductible and pocketing the difference in premiums. You could put all these savings into a special 'insurance' savings account if you needed to, and draw from it whenever you want to 'make a claim'. If you are reasonably well off, he even recommends not insuring the body of your 1+year old car, because you can take the loss.
Do this, except for rare & life-changing events, where if you are unlucky, it ruins your life and/or the lives of people you care for. No modest +EV financial gain is worth that risk. Lesson: get some health insurance. Or move to Canada. Yay.
And the auto maker's books hurt due to escalating health care costs or retireees, so they packed it in.Quote: IbeatyouracesI see it every day. My eyes hurt!
The doctor salaries are fifty percent of what they are in the USA.
There are scandals that go unexposed due to lack of incentive for exposure.
That unlit parking lot can be a source of pressure for better care if a lawyer gets involved.
Many patients now make use of the Medical Travel industry. A whole industry involved with "surgery shopping" and "insurance shopping".
Going "naked" .... without insurance is considered fool hardy. Medical savings accounts get wiped out with the ambulance ride.
One research doctor got caught up in a chat room with a 13 year old girl. He was making 800,000 a year. His bail was sixty grand. His lawyer was eating up the rest, after two years of negotiation fees to a top knotch California attorney, he copped a deal for two years of prison. He was also divorced and lost his job.
One woman was having trouble in her marriage. Her insurance provided zero pre-break up counseling; but 13 weeks post break counseling. Did that policy help her?
Vegas -- a couple years back.
-On the way out in the morning, I can tell something is wrong. Not sure what. Irregular heartbeat?
- go to quick care clinic, get EKG, IV, finds irregular rhythm (around $400 so far) this from my late bills
- Doctor sends for ambulance to transfer to main medical center ($900)
- Get trip into cardiac unit, harder to remember to itemize this part. Main doc $1000, two other docs a couple $1000. Some misc drugs and more monitoring, must of been another $1000, suggested treadmill test, that and the lab tests, and nurses, probably $50 to change sheets in the morning.
Anyway, the total was just north of 10K
Diagnosis. Didn't find anything, Got no treatment. No heart attack, No heart condition. Still alive, still not on heart treatment of any sort.
But I did have irregular rhythms.
NOTHING can be expensive.
Quote: FleaStiff
One woman was having trouble in her marriage. Her insurance provided zero pre-break up counseling; but 13 weeks post break counseling. Did that policy help her?
"Counseling" covered by health insurance? Good grief!
Health Insurance as it is sold is a crappy deal. A male has to buy maternity coverage he will never use. We all have to buy substance abuse coverage which most of us probably do not want. It can cover all kinds of "extras" that spring up a "its free, we will bill your insurance!" industry. The person who prefers that $10K deductible to get a low premium is left out in the cold.
Americans think the doctor visit should cost $10 so they can spend their money on an oil change for $20.
The same situation exists in auto collision insurance. We SHOULD, from a rational standpoint, simply accept the risk that we may drive our shiny new Ford Mastodon into a ditch the first week we own it and then be obligated to make the payments anyway for the life of the loan and in the meantime, drive a ten-year-old beater. This is actually a better bet than paying collision insurance, and the insurance companies have made sure of that.
The difference, I think, is that the impact on quality of life from a catastrophic outcome, being subjective, is different for every person. I could live without my new car, but I don't think I could live with a serious untreated (or undertreated) medical condition. Of course, in terms of medical care, no one should ever have to make that choice. Aside from your personal political convictions, etc. etc., I think it is better for the body politic if as few people as possible have to make such a decision. It could easily be a perfectly rational choice for someone to NOT obtain medical insurance--or medical treatment, if uninsured. You really don't want that to happen, though, as there will be a far greater cost to society down the road--either that person will develop a more serious condition that will require costly emergency intervention, or rich people will have to step over his corpse as it lies on the sidewalk.
Wouldn't you know, the following year, I did have a major illness, contracting infective endocarditis, with is a bacterial infection in the blood or spread through the blood that settles into and eats away the heart valves and lining. It came on very quickly, I was sick for a few days and by the time I sought medical attention, quite a bit of damage was done, requiring heart valve replacement surgery. I was laid up for 3 full months, and suffered a bit of complications, during recovery and accumulated significant medical bills. These amounts would have wiped me out if I had to pay them with no insurance, or I would have had to file for bankruptcy or not pay the bills and deal with bad credit. I don't know how it would have played out, but for me, looking back, it was a good decision and lucky timing. In the 3 years since, I have suffered some sort of ailment every year, torn ACL in my leg requiring surgery, and a couple melanoma surgeries this year and it just seems like a really good idea for me, or someone in my position. You don't need the double whammy of down time, with no money coming in, on top of huge medical expenses.
djatc, axelwolf, I recommend you guys look into insurance, if only one of the cheaper policies with a higher deductible that will protect you against something really big. I know it is one of those things that is far from your mind for a healthy young person, but worth considering, in our line of work, IMO
Quote: EaglesnestNominally, health insurance is a bad bet, as any insurance offered by a profitable company must be.
That's only true from an EV standpoint. But EV is not everything. It is mathematically sound to pay to offload variance (ie, hedge, insure, or whatever you want to call it) in some situations (as defined by the Kelly Criterion).
For a gross oversimplification:
Suppose your total net worth is $1,000,000. Suppose that, if you get some expensive-to-treat disease, it will cost you $500,000 to treat it. Furthermore suppose that your probability of getting that disease is 1 in 1000.
Buying insurance is 0EV at a price of $500. However, we do not want to maximize E(net worth). We want to maximize E(log(net worth)). Therefore you should be willing to pay up to $692.90 for this insurance, even though this "bet" has a "house edge" of 27.84%!
A 60 yr old male who gets the cheapest insurance possible ... with $6000 deductible ... in my state will lay out about $31000 in insurance before he gets covered by Medicare. That's if inflation in the cost of his premium is only 8% per year.
You do have to wait till the next enrollment period to fix the problem of 'no insurance with a chronic expensive condition', but it is fixable then since previous conditions do not prevent getting coverage once sick. Anecdotally that seems to be some $80-100k thing, any further catastrophe also covered by the same tactic.
You pay the first $6k yourself. At 6% interest with the same amount invested monthly, you'd earn about $6500, so you're costing yourself that too.
Total cost $31k + 6.5k = $37.5k to cover a practical max of $100k [yep I know it could be more] and you can take it off your taxes should it happen. Under these assumptions you almost have to say there would have to be a 100% chance of a medical catastrophe before it makes sense to do that [and with the assumption you do have the money].
I will continue to lay out this money to keep peace with my wife. Well, OK, a certain amount of personal peace too. But the fact is, this stuff is too expensive [then again if I get pregnant I'll be all set]
My car insurance is $111 a month. THAT I have a problem with. Why am I spending so much to insure a goddamn machine?
I wish my employer offered a nice plan but they cover absolutely nothing. Technically, I'm not even employed by them.
Quote: IbeatyouracesInsurance, of any kind, is the third biggest scam ever invented by man. Religion and social security are numbers 1 & 2 respectively.
Health insurance is high because there are so many
bad doctors getting sued all the time. So they have
to charge a lot to pay for THEIR insurance.
My doc charges $350 for a yearly physical. He
has his own lab in the office for blood work. The
nurse hooks up the EKG and a reading comes
out. The doc comes in, looks at the tests results,
the blood work, says everything is OK, asks if
there any problems, and leaves.
How much out of pocket was that for him. $75
tops cause he paid for the machines ages ago.
The rest goes for office rent and his malpractice
insurance.
Quote: kewlj
djatc, axelwolf, I recommend you guys look into insurance, if only one of the cheaper policies with a higher deductible that will protect you against something really big. I know it is one of those things that is far from your mind for a healthy young person, but worth considering, in our line of work, IMO
I've always thought insurance was stupid, since I never have used enough medical care to justify the cost, but I have come around from that train of thought to I will pay for it, but I hope nothing bad ever happens to me.
Although life insurance seems extremely -EV. I brought up this topic before and still agree it is a bad bet. My beneficiary is my mom and she is relatively well off, and I hope to god I don't die before her.
Quote: djatcI've always thought insurance was stupid, since I never have used enough medical care to justify the cost, but I have come around from that train of thought to I will pay for it, but I hope nothing bad ever happens to me.
Although life insurance seems extremely -EV. I brought up this topic before and still agree it is a bad bet. My beneficiary is my mom and she is relatively well off, and I hope to god I don't die before her.
Life insurance doesn't make any sense at all until you have a family that depends on you. In that case, it can be worth some peace of mind.
Quote: AcesAndEightsLife insurance doesn't make any sense at all until you have a family that depends on you. In that case, it can be worth some peace of mind.
Do they offer locked in lower rates if you buy it before you have a family? That's how they get you to consider buying something before you need it.
I know some companies have sold policies to children (parents pay for it) but it locks in low rates. So, it's actually the child's adult policy. The child takes over the low rate payments when he becomes an adult.
The health insurance coverage of seeing a doctor for check ups is not a good return of investment.
But the cost of seeing a doctor in the emergency room is very costly.
I wonder if you can pay out of pocket to see a doctor at a reasonable rate for injuries.
I'm curious if you can see a doctor and still get prescriptions without health insurance.
What is the chance of getting cancer per age?
If you get into a serious car wreck. The emergency room bill could be 100's of thousands
I guess if you were extremely wealthy into the millions, you could take the chance of coming out ahead if you paid for everything in cash.
But for normal people insurance would take the risk out
I don't think that hospitals can deny treatment if you have no insurance. But hospitals do get stiffed for bills.
https://www.marketwatch.com/story/million-dollar-health-bills-have-spiked-and-expensive-drugs-are-playing-a-major-role-2018-07-16