Reply #123: Your understanding of insurance . . . [View All]

[NavajoRug]

. . . is right on target. One thing I would dispute, though, is that "insuring for things that are inevitable" is somehow a problem. There is nothing more inevitable than death, and yet life insurance is a remarkably stable business in terms of costs.

The real problem with health insurance isn't so much the "big cases," but the relatively minor ones that take up so much time and paperwork. For the life of me, I can't understand why anyone thought it was a good idea to have an insurance company cover routine visits to the doctor. The whole purpose of insurance is to have something that covers catastrophic illnesses and injuries -- not "ordinary" medical care.

"It's not fair to have paid into health insurance all your life and seldom use it except for routine care and then when the big cancer comes along they dump you, or you get old and they dump you."

This is exactly why I have been such a strong supporter of tax-deferred accounts for medical expenses. Because the flip side of what you've said is also true -- it's really not fair to ask an insurance company to pay for medical procedures that often didn't even exist for all the years that you were paying premiums. That's why health insurance costs are so high these days -- because the standard of care is rising so fast.