> Getting insurance as an individual is expensive because you’re not part of a group plan.
I see people say this constantly. Insurance by definition is literally always a "group plan"—everyone who buys insurance is in the same group. That's literally the point of insurance. It's why it exists. That's what it is. That is fundamentally how insurance works. All insurance, in every category, of every type. There are no exceptions.
Insurance always pools risk across all payers (everyone is in the "group"), and then you expect only a fraction (but we don't know which fraction, of course) to require a payout in any given payment period.
If you're selling something that doesn't work like that, then it's not insurance—by definition.
You see it constantly because it is true. A group plan is a thing. Yes you’re still in a “group” when you register as an individual, but it is an “individual plan” and semantics doesn’t really help you out.
The difference is that if I know the mean and variance of expected health costs for the group, I can offer a lower premium to every individual member because the variance of total actual cost goes down by n^(-1/2) and I don’t need to cover my butt as much. Especially since almost all group plans are centered around relatively healthy working age people. The privilege of group plans is you’re in a healthier subset.
Individual plans are for people not on those plans and they suck dickballs. There is a high chance of moral hazard. There’s more retired old people. You offer little value to the insurance company so you don’t get to negotiate like a group plan does.
Medicare is mandatory in the US for retired old people. It's universal, it's mandatory, and it covers everything. They're literally not in the insurance pools, so I don't know what you're talking about.
As for the "group plans", those "groups" are too small for insurance purposes—they do not spread risk effectively. The entire "group plan" thing is a scam, and it would be trivial for gov't to just outlaw them entirely in the US, and force individual pricing on business-purchased health insurance like we do for every other kind of insurance we have. Costs would go down for everyone, and individual plans would no longer "suck dickballs".
That said, that is not how I would "fix" the health insurance issues we have. But it's at least better than what we do now...
> Medicare is mandatory in the US for retired old people. It's universal, it's mandatory, and it covers everything. They're literally not in the insurance pools, so I don't know what you're talking about
How about everyone who retired before 65?
As for your other points, I mean yeah, we shouldn’t have employers provide it. But they do, and you need to recognize it. There are definitely group plans large enough to spread risk.
That's all fine in theory, but do some shopping-around and you'll see it's simply untrue.
Personal anecdata:
2018, my employer didn't offer insurance. I signed up for a "silver" tier individual plan ($1250 deductible, good coverage) on the ACA marketplace and paid $170-something/mo. (after receiving ~$250/mo. in tax credit).
2019, my employer starts offering insurance, so I'm no longer eligible for the ACA tax credit. The only plan they offer costs me $125/mo., has a $4500 deductible, and extremely skimpy coverage. According to the literature they gave us, my employer's pitching-in another $400-something/mo.
So this group plan costs significantly more, has a much higher deductible, and covers significantly less (in my case, it's the difference between medication being covered and not).
Huh I didn’t know about the tax credit. That sounds like another layer of backwards thinking and another reason to get rid of the whole practice. I’m sorry for your situation.
The "Premium Tax Credit"[0] was a centerpiece of the Affordable Care Act (aka Obamacare), and widely publicized by the media and Obama. ACA exchange premiums are not affordable for most of the people it was trying to help without the tax credit.
I don't think I understand this. Take two scenarios. In both cases, I'm 22 years old, just exiting college, and starting my first job.
In scenario 1, I start working at a 1000 person company that offers insurance benefits. I sign up for their plan, and my employer pays for nearly all of it.
In scenario 2, I start working at a tiny company that doesn't offer insurance benefits. I find an individual plan (coincidentally from the same insurance company used in scenario 1) that suits me, and sign up for it, paying out of pocket.
The total amount paid to the insurance company in scenario 1 is, as is typical, lower than in scenario 2.
In both of these scenarios, the insurance company doesn't know anything about me. For scenario 1, sure, they might know the mean and variance of expected health costs of the 1000 people already at the company, but that does not extend to me. They cannot assume I will conform to the rest of the group. I am new, and an unknown, and they do not know how I will affect those statistics. For scenario 2, I'm just another independent signup. I might have health care costs in line with the average of all of their beneficiaries, or I might be an outlier (on either end), or something in between. But that's the same as scenario 1.
This feels like it has nothing to do with risk assessment; this is just a reflection of the company in scenario 1 having greater negotiation power because they're representing 1000 people, versus you just representing yourself.
I see people say this constantly. Insurance by definition is literally always a "group plan"—everyone who buys insurance is in the same group. That's literally the point of insurance. It's why it exists. That's what it is. That is fundamentally how insurance works. All insurance, in every category, of every type. There are no exceptions.
Insurance always pools risk across all payers (everyone is in the "group"), and then you expect only a fraction (but we don't know which fraction, of course) to require a payout in any given payment period.
If you're selling something that doesn't work like that, then it's not insurance—by definition.