Defining Health Insurance
Defining Health Insurance
Why do so many people think they have to be covered by "health care insurance"? While watching a game show on TV recently one of the contestants stated as her reason for being on the show was "to win some money so I can get health insurance and have a baby". This infantile attitude made me sad because I realized there are probably millions of people in society who share this attitude and it is far from reality. It motivated me to write articles defining "health insurance" and helping people understand why it is not the panacea so many people think it is. In fact I contend that substituting "catastrophic health insurance" for "co-pay health insurance" would cause health care costs to drop by as much as 70% almost immediately.
In truth, "co-pay health insurance" is nothing more than a financial plan to pay for health care services you may need provided the insurance company agrees with your doctor's assessment and agrees to pay for the services. People need to realize that health insurance is a BUSINESS and the insurance companies really do not care about your health. It is not from the goodness of their heart that companies make health insurance available for purchase.
Insurance by definition "is protection against loss". Most people own life insurance and property insurance which covers your automobile and your home. In the case of life insurance, agreed upon benefits are paid to the designated beneficiaries after the person whose life is insured dies. If a home owner has insured his home against physical loss, he collects agreed upon benefits only when the home is destroyed by fire or natural causes. Your automobile and occupants therein are insured against loss, either usability of the automobile or loss of life as a result of an accident or theft and even then only an agreed upon amount. Another way to look at this kind of protection insurance is to understand that insurance companies do not pay for your home's utilities or your automobile's gasoline and oil. Health insurance is a totally different type of insurance and we will begin that discussion now and in subsequent articles.
Think about this, "catastrophic health insurance" comes real close to meeting the definition of "insurance" as protection against loss. I have a recommendation that would make even more sense for someone owning catastrophic health insurance. Let's assume catastrophic health insurance begins paying for health care services when the policy owner pays $10,000 in any given year for health care needs, and your premium payments are $2,000 per years. If in any given year your health care costs and premiums total less than $10,000, you should be allowed to save the unspent dollars into a tax advantaged retirement account. This not only incentives everyone to take care of their health but rewards them for doing so in huge ways. Think about retiring with money you do not have to pay taxes on. We can make this happen if we elect politicians who will do the right thing because I know insurance companies would embrace the concept.
In the next newsletter I will identify the reasons for not embracing co-pay health insurance and I hope everyone would be interested enough to spread the news. Forward the articles to your friends and relatives and encourage others to get involved. Co-pay health insurance allows insurance companies to make determinations about your health based on cost, and can tie the hands of your doctor when treating your health needs. Recently a friend of mine took his son to the emergency room and the doctor ordered a treatment for his condition. They waited at the hospital for hours while the insurance company made a determination about paying for the services. Let me know if you have a question about health care you would like me to address.