What is the purpose of insurance?
To transfer the possibility of a loss (risk) to an insurance company, which in turn spreads out the costs of unexpected losses to many individuals. Though the purchasing of insurance will not eliminate the risk of death, illness, injury or property damage, it relieves the insured of the financial losses these risk bring.
What is the purpose of the health insurance exchange?
The purpose, is to give people a place to go where they can buy insurance, when the insurance companies don't want them due to (usually) preexisting conditions. Kinda like, where does the guy with five DUI's go to get his car insurance? The state assigned risk pool. The benefit is, you'll get a policy - you cannot be turned down, and they cannot exclude preexisting conditions. In reality, though, people who couldn't afford a HIPAA policy, aren't going to be able to afford an exchange policy, either.
What is the point of health insurance?
The same as with any insurance, it allows you to transfer risk.You hope you don’t get into an accident or have your car stolen, but the risk is there so you transfer the risk of that loss/cost to your auto insurance companyYou hope your home isn’t damanged by a storm, or broken into and your stuff stolen/damaged, but there is a risk so you transfer the risk of that loss/cost to. your homeowner’s insurance company — Same applies to renters who transfer the risk of the loss or damage of personal property in a rented house or apartment.You hope you don’t die young, but —and this is especially true if you have a family who depends upon your income— you realize there is a risk you could die prematurely which could leave your family hurting financially. You transfer this risk to your life insurance company where the proceeds of the policy provide income replacement.And, just like these and any other examples, there is a risk you could get sick, severely injured, or end up with a chronic illness or condition that requires ongoing treatment. Healthcare in the US is expensive and all too often, prohibitively expensive. Heath insurance transfers the risk of your having large and unaffordable medical bills to the insurance company.This is how all insurance works—it simply transfers risk. You pay money into the gigantic insurance company’s pool of cash. That cash pool is used to pay the overhead of running the company and to pay claims from all policy holders. I mention that last bit because I get annoyed at all the people who object to the ACA and any mention of universal healthcare with the argument that they don’t want to pay for someone else’s health care. If that is your position then by all means stick to it, but understand how insurance—all insurance—works and to really stick to your principals then you will have to cancel every insurance policy you have. That way you not only will not have to pay for someone else’s healthcare, but you can avoid paying for someone else’s auto loss, homeowner loss, death, etc., etc., and no one else will have to pay for your loss.The downside is, you will undoubtedly assumed a huge financial risk that you can’t afford and in the case of health care might join the 633,000 and climbing number of medical bankruptcies. Oh, you won’t be able to buy a home or a car from a dealer, but hey…it’s the principal, right?
What is the real purpose of Health insurance in America today?
.What is the purpose if US health insurance?US health insurance is coverage for medical expenses and may include prescriptions, preventative measures, and medical equipment. Premiums are paid partially or wholly by individuals, employers, unions, professional organizations, state governments, federal governments, or federal subsidies.US health insurance is working better than the previous years. What has happened since Obamacare is more people are covered who were not before and more regulation regarding private insurance rejecting claims. Private Insurance have always resisted payment. Most private insurance companies are managers for self-insured employers. In the past employers were more generous. Now insurance managers such as Anthem, BC/BS, Atena, and other name brands are under considerable pressure to control costs by rejecting claims.Health insurance coverage and premiums vary widely.Most plans have an annual deductable of $1,000 or more that the beneficiary pays before health insurance paysSome plans also require a fixed co-payment after the deductable is met and it is paid directly to outpatient healthcare providers at the time of service.A typical co-pay for a routine visit to a doctor’s office, in network, ranges from $15 to $25; for a specialist, $30-$50; for urgent care, $75-100; and for treatment in an emergency room, $200-$300. Co-pays for prescription drugs depend on the medication and whether it is a brand-name drug or a generic version.Under some plans, co-pays contribute to the policy’s deductible; in others, a deductible must be met before a co-pay applies.Health Insurance Costs, Premiums, Deductibles, Co-Pays & Co-InsuranceMany require percentage co-insurance of 10-25%— splitting the cost between the beneficiary and the insurance provider.Many plans restrict what providers (in network) a beneficiary can use and require pre-approval for specialized service.Health insurance is insurance against the risk of incurring medical expenses among individuals. According to the Health Insurance Association of America, health insurance is defined as "coverage that provides for the payments of benefits as a result of sickness or injury. WikiImageSource: Here's How Much the Average Worker Pays for Health CareHealth Insurance - Obamacare FactsHealthcare.gov
If the purpose of (health) insurance is to spread risk, how does this concept work in the case of chronically ill people, when diseases: conditions have already been realized and thus are no longer probabilistic?
Well, to be quite blunt, there's almost no f***ing point to health insurance if it doesn't cover chronic diseases.Because, let's be real — nonchronic conditions aren't all to worry about.Taking myself as an example, I actually have not ever broken or sprained anything in an accident of any sort. Nor have I gotten too many sudden infections needing hospitalization.In other words, the acute stuff hasn't really struck me. On that front, insurance loves me.But, I need to inject thousands of dollars worth of TNF-alpha inhibitors a week to try to keep my Crohn's under control, for the rest of my life or maybe until a better medication comes along. That excludes colonoscopies and bloodwork to track disease progress and potential future operations to remove too damaged bits of my intestines, by the way.Yeah, that is way more expensive than it would be to fix a broken arm once, let's say, as an acute example. I'd never be able to afford it without help.So, yeah, maybe you could technically say it would be known to future insurance companies as opposed to being a vague potential risk. But pragmatically, I still need that coverage.Just like you would if you develop a chronic illness.Furthermore, I'm not sure it is much different in the end in a sense. For the insurance companies still can easily know what percentage of the population gets a given chronic disease — when they sign on 100 “healthy” people, they can already know one is likely to get Crohn's, for example (the disease incidence is only slightly lower than ~1%). It shouldn't surprise them to just be confirmed on that.Anyway, I hope this explains why and how chronically ill people are still covered
What is the purpose of having co-insurance?
I first want to clarify the definition of co-insurance because many people I've spoken to in the past mistakenly believe co-insurance is some kind of secondary insurance coverage. Co-insurance is a type of cost sharing that an insured is responsible for paying. Unlike a co-payment which is a set dollars amount a patient pays for a particular service, co-insurance is a percentage. Cost sharing in general is a means of holding covered individuals accountable for their health and healthcare choices. It encourages people to use less costly treatment options and to stay healthier when possible.
What is the purpose of an enrollment period for health insurance?
There are several, but the biggest thing to remember is that with sllbpolicies now guaranteed issue no underwriting nobody would buy health coverage until they had to go get something fone.. minor or major. So ex.. I go uninsured in Jan and feb. then in mar I buy insurAnce because I have a knee surgery. Then I go uninsured until December when I get pneumonia and need antibiotics. My claims far exceed my premiums. Why buy something you don’t need if there are no restrictions on getting it whenever you need it? Everybody would do this. And if everybody did this the insurance system wouldn’t work..
Isn't the expected value of health insurance for a healthy purpose going to be highly negative?
And so, it might be unwise for a healthy person to purchase health insurance on the individual open market? First, we have the insurance companies as a profit-taking industry. They exist to make money. So obviously they take in more premiums than they pay out for medical expenses. Right off the bat, we have a negative expected value for the buyers of health insurance. In other words, you should expect that the premiums you pay to the health insurance company will be more than the benefits you get back, on average. But on top of that, for a HEALTHY person, the difference would be even greater. Since your risk is grouped together with the risk of more unhealthy people (obese, smokers, etc), you're basically subsidizing their insurance. So the difference between your premiums and the expected benefits you get back is even more. It seems like a very fit, health-conscious person is really taking it on the chin by buying health insurance in the individual market. Maybe they'd often be better off by just building up a health savings account and self-insuring?
What are the functions of health insurance?
Health care is an important factor in one’s life. Due to the extremely unhygienic conditions, it is easy to fall prey to a lot of diseases. This may cause unwanted health problems and could lead to hospitalization. In a country like India, where your medical expenses are huge, it is usually difficult to provide for the medical bills at a single go or on an emergency basis.Health problems can be caused due to unwanted and unforeseen accidents and ailments. Hence, in order to prevent yourself and your family from such instances, it is better to avail a health insurance. A health insurance is a policy that will protect you and your family from the previously mentioned instances and will provide financial aid to cover the medical bills you claim either pre-hospitalization, during hospitalization or post hospitalization.Hence, the two primary functions of a health insurance policy are:1. Provide medical aid against various ailments2. Provide a discounted medical aidThe cost of your health insurance depends on various factors such as the type of the health insurance, its coverage, the benefits provided and the add-ons you opt for.Following are the various types of health insurance policies available:1. Health insurance for Individual: A policy that covers various ailments occurred to you.2. Health Insurance for Family: A policy that covers various ailments occurred to you and your loved ones (parents, spouses and children)3. Global Personal Guard: A policy that covers various ailments occurred to you and your family (parents, spouses and children) in India and Globally (While travelling abroad)4. Health Insurance for Senior Citizens: A policy that covers various ailments occurred to your parents5. Health Insurance for Critical Illness: A policy that cover various critical ailments (cancer, stroke, heart diseases, etc.) occurred to you and your family6. Health Insurance for Personal Accident: A policy that covers various injuries sustained by you due to an accident7. Health Insurance for Women: A policy specially for women that cover various ailmentsEnsure that you buy a health insurance now and safeguard you and your family from various ailments!Hope this helped you crystallize your perception about health insurance.