Why Is Health Insurance so Complicated?

Why is health insurance so complicated, while car insurance and life insurance are so simple? Can health insurance be more like, well, insurance? Lanhee Chen, fellow at the Hoover Institution, explains.

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Script:

Americans carry many different forms of insurance. There’s car insurance, home insurance, life insurance, even pet insurance . . . Most of these insurance policies work well and are fairly priced. But there is one glaring exception: health insurance. Only health insurance becomes more complicated and more expensive at the same time. So, the obvious question is: why?

To answer this question, we have to start at the beginning. What is insurance? It’s pretty straight-forward: You pay a monthly fee which provides financial protection against unforeseen, sometimes catastrophic, events. People buy homeowners insurance, for example, to protect themselves from the financial loss incurred in the event of a fire, a flood or theft. Because millions of people are paying into the insurance pool, the pool has enough money to cover the unlucky person whose house does burn down.

And since insurance is meant to share risk, it only stands to reason that higher-risk individuals have to pay more to be insured. Someone who has had two accidents is going to pay more for car insurance than someone who has never had an accident. Why? Because their track record indicates they are more likely to have another accident.

But while insurance provides a bulwark against unforeseen loss, it does not protect against routine expenses. Car insurance protects you in the event that you wind up in a car wreck or your vehicle is stolen, but it doesn’t cover routine maintenance like oil changes, replacing brake pads or tire erosion. Why? Because everyone needs routine oil changes, new brake pads, and new tires. So, there is no risk to protect against.

Health insurance in America works very differently. Many of us have health insurance plans that aren’t insurance at all. They’re really pre-paid health care plans. They cover routine check-ups, less serious illnesses, and recurring expenses like prescription medications in addition to protecting you from a health disaster. All of this has made healthcare much more expensive and complex than any other form of insurance. That is true whether you get your insurance through your employer, through the government, or if you pay for your own plan.

The Affordable Care Act, known as Obamacare, was passed on the promise that it would fix these issues and bring down healthcare costs. But it has actually made the problem much worse.

First, it limited the variety of health insurance plans private companies could offer. It did this by mandating that every plan had to cover the same set of ten health benefits, including preventive care, maternity care, mental health care, and contraception.

Second, Obamacare prevented insurers from charging premiums based on the risk they were assuming. A person with a much higher risk of getting sick couldn’t be charged more than a person with a much lower chance.

These two aspects of Obamacare – requiring all policies to have certain coverages and not allowing insurance companies to charge more for riskier clients – caused the price of insurance to rise dramatically. In Arizona, for example, the price more than doubled between 2016 and 2017 alone.

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Obama Promises To Lower Health Insurance Premiums by $2,500 Per Year

President Obama repeatedly promised that his signature health law, the Affordable Care Act, a.k.a. Obamacare, would reduce insurance premiums by $2,500 for the typical family. Instead, premiums have increased by a comparable amount. Video compilation by Naked Emperor News of TheBlaze.com. For more on how Obama came up with this faulty projection, read this account in the New York Times: http://www.nytimes.com/2008/07/23/us/23health.html?_r=3&pagewanted=all

Round 3 of Jimmy Kimmel’s Health Care Battle

Jimmy has found himself in the middle of a battle over American health care, so tonight he responds to more criticism from Senator Bill Cassidy and those other jerks who want to take our health care away.

Jimmy Kimmel Fights Back Against Bill Cassidy, Lindsey Graham & Chris Christie https://youtu.be/wB5Hek7Z2b8

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Round 3 of Jimmy Kimmel’s Health Care Battle

Get lower out-of-pocket costs in the Health Insurance Marketplace

The Marketplace cost-sharing reduction lowers the amount you have to pay for out-of-pocket costs like deductibles, coinsurance, and copayments. Visit HealthCare.gov to see if you can get coverage outside Open Enrollment: http://hlthc.re/R6AlFe

36 Times Obama Said You Could Keep Your Health Care Plan | SuperCuts #18

President Obama had pledged publicly at least 36 times that his health care plan, known as Obamacare, would not force people who liked their current coverage to lose it before "tweaking" that promise Nov. 4.