It's risk pooling.
Yes, but the risks are not just big and rare ones. Tiny, common "risks" are covered, too, which dilutes the concept almost beyond recognition. I have a friend who's just been diagnosed with with bone cancer in his hip. That's very rare and very expensive. A buck a year from each of us would insure our risk against that, despite the cost of treatment, and that's a good application of insurance.
OTOH, every kid in every family is going to have at least one cold per year. It's inevitable. It would be easier and cheaper to cut out the middleman and just pay for each trip to the doctor. And given the "commons" problem, of course each kid goes to the doctor for each cold even though the doctor adds no value. You said yourself it's untenable. Insurance is only a viable concept for rare and costly ailments.
If you are into sports and have a lot of little injuries--pulled muscles and the like--you may sign up for an annual subscription at a spa rather than paying on an ad hoc basis. The company get subscribers and provides a "common" where services are available as needed. It can provide subscribers access at a reduced rate because it pools their dues to support the common. That's not "insurance," it's a spa membership. It's the same as having dental "insurance" where everyone in the plan gets his or her teeth cleaned twice a year, no more, no less. So what's the point of having "insurance" for that?
Blue Cross-Blue Shield used to pay more for preventive maintenance but had to cut it out.
I think your focus on preventive maintenance confuses our communication on the question of insurance. In case I'm still not making myself clear, I'm not just talking about HMO/PPO. I have Blue Cross and I don't use a preferred doctor. I don't consider my "insurance" to be insurance, either, beyond the catastrophic part of it. The notion of preventive maintenance may be useful to differentiate between HMO and other health plans, as you did, but it is not relevant to differentiate between health "insurance" and classic insurance.
To switch from my issue, the insurance paradigm, to your issue, preventive maintenance, you may be right about Blue Cross. I don't know. I've never looked at it. But I can testify that I get all the preventive maintenance that I can imagine. What would I get in the way of preventative maintenance with Kaiser that I don't get now? |
