Question: How is it that Auto insurance and Life insurance work OK, but not Health Insurance?

[ThomWV]

I have little doubt that when I die my life insurance will pay as expected. If I have an automobile accident my insurance company will pay for the repairs minus the deductable, they will cover liability and the incidentals too - not much question about it. Homeowner's insurance seems to work well for most people.

So how is it that Health insurance is a disaster in this country?

[WCGreen]

1. We had a small claim on our Home Owners policy and we were promptly

dropped after they paid out...

So yea, if you want Health Insurance to operate like Auto and Home then everytime you got sick, you would see a spike in your premium or dropped. also, if you lived in an at risk area, your premiums would be higher, just like they are for Auto and Home.

[Javaman]

2. Maybe it has something to do with the living?

Houses and cars are of relatively fixed value.

Dead is dead, kind of hard to split hairs over that.

But because medical care is a major variable, it's wide open to opinion and fraud.

just my two cents.

[glowing]

3. You think it works? My rates continue to increase, and anytime you

actually need to use them, they hire a team of lawyers to work on screwing you over. Every hurricane season, my car insurance goes up.. because of the maybe. If there are any claims anywhere in the state (since its FL-no fault shit), I get an increase just in time for the second quote. (I can only get ins. every 6mo., there is no yearly quote.. another buy off from the pols.) My homeowners is Citizens, last resort state insurance... the state insurance has to be 3times the amt that reg. insurance premiums would be.. so that the entire state doesn't try and insure thru a govt. option.. however, in FL, no ins. co. will insure my home.. It doesn't work for people in FL, and at some point it will work less and less for others.. esp. if we continue getting phenomenal storms that devastate areas.

[ejpoeta]

4. i think i can explain this....

see, the purpose of auto and life insurance is it is 'insurance' against something bad happening, but your ultimate goal is NOT to have to use it. the problem is, that health 'insurance' isn't meant to be a proposition where you don't ever use it.... you go for checkups and need meds etc.... so that is why health 'insurance' doesn't work.

[RaleighNCDUer]

15. There you go. Imagine what your car insurance would be like if you

filed a claim every time you had an oil change or a tune up.

[sandnsea]

21. Everybody dies

So life insurance will be used. It's just more concrete. You buy a certain amount, and that's it. It's not like health care where you never know if you'll get hit by a bus and get taken to the morgue, or need a transplant and twenty years of medication. With auto and life insurance, if you need less, you pay less. Health care is just not predictable at all.

[liberal N proud]

5. If you don't have auto insurance, you have a couple opitons...

You can drive without or don't drive. If you drive and get in a wreck, you are liable.

If you have life insurance, your family gets $0 when you die and has to pay for the funeral out of their pockets.


Health insurance is a little different, you get sick, you need a doctor or you die. The doctor charges you and you go broke unless you have insurance.

A friend who has cancer says if the cancer doesn't kill you, the bills will.

[imdjh]

6. Because car insurance doesn't pay for maintenance...

.... and maintenance, by and large is not a function of loss. All the comfort systems of my car can fail over time, and it doesn't raise the likelihood that I will be at fault in an accident and cause the insurance company loss. If the car insurance company had to pay to repair AC units, electric windows, and stereo systems then the price of the insurance would rise significantly.

[ingac70]

7. Who says they are ok?

As big a scam as health insurance.

[SoCalDem]

8. Because you only die once, and

many more people pay into the pool than actually have fires, car wrecks etc.

and as you age, your polices for life insurance usally cost more and more, until you cannot afford to keep up with payments. Many older people actually have to drop their coverage for all but a burial policy because they cannot afford the premiums.

[shraby]

9. Don't count on life insurance paying...I know an old

woman who never collected from the policy her husband carried for many years. She finally got tired of fighting them and gave up. The policy for my father couldn't be found by the insurance company..my mother had paid the premiums for years cause she was in charge of paying the bills. When she died, the company was called to see how much coverage he had and they informed us they had no record of any policy. My advice is if you have a policy, double check on it.
Homeowners are now being told that if they make a claim, the rates will rise, and if they make another, they might get dropped. Same with auto insurance.
In Michigan some years back when they started requiring that everyone had to have auto insurance, the insurance companies were cancelling policies for any reason and that required a car owner to be put into the high risk pool with outlandish premiums. It got so bad that the legislature had to adjust the law so people couldn't be cancelled so easy. I had never seen so many dented cars on the road as I did before the adjustment to the law. It got so nobody was making any claims if their car was driveable.

[ThomWV]

10. In my experience - and I've had more than I would like - life insurance pays off as expected.

First a sister, then my father, then my mother, then my father in law, then a brother in law, most recently a close friend's mother (who was also a close friend) and the son of a lady I worked with - each of them paid quickly and as expected.

Look, I know there are times when folks get screwed but I'm just saying that overall as a business there doesn't seem to be the level of pure and simple screwing going on in other areas of insurance that there is in health care coverage. The question in a business sense is, why?

[RDANGELO]

11. The states regulate the auto insurance companies

to make sure that everyone can afford it. If the insurers had their way, the people who have occasional accidents wouldn't be able to buy insurance. This means they make less profit. Some state do that better than others. Nobody really regulates the health insurance companies. They do whatever they want. Health care is a lot more expensive than auto insurance.

[tomm2thumbs]

12. good question and thanks for posting

i always had mixed feelings about age or gender based auto insurance rates, (a bad driver is a bad driver no matter what the statistics argue either way) but hopefully we will get to a point where the profit incentive to rape people's wallets will give way to the idea that consumers will see a competitor out there NOT raping their wallets and folks will go there to get coverage.

wondering if Costco is going to look into getting something going with a health care insurance plan? although they might reconsider selling so many hot dogs and pizza and sodas and start adding milk, more salads and fruit options. heheheheh

[GreenTea]

13. You have an accident...Your rates will go up considerably, auto insurance is based on you never

using it...if you do your rates will go way up.

It's the first thing auto insurers ask when you want a policy, have you ever had an accident and your insurance will be much, much, higher if you have.

And I certainly wouldn't trust my life insurance to be there 100% after I die...I've heard many dreadful stories of searched out technicalities by the insurance companies so they can get out of paying part or all of the premiums to the survivors.

That's what these insurance companies count on, they count on it big time...that all this bullshit rarely gets publicized, they know few will know or even hear about it and those that do will hear how it was the fault of the person buying the insurance NOT the insurance companies....

Who would of known all the horror stories about medical insurance companies, if not for the demand for government health care public option, the horror stories of people being thrown off, premiums not being honored by the insurance corporations etc. etc. All the bullshit now by the health industry insurers is being well publicized?

If one puts your faith in the insurance industry one gets what one deserves..They a are in business to fuck you and find ways to do it and pay little as possible for huge profits...If they were in business to pay off every insurer to the fullest maximum as expected....they would of been out of business long ago...The way to make huge profits is to fuck the consumers....

Sorry if insurance is your profession and I would expect you would to defend it and say the opposite.

Insurance is a slimy business, but they do put a clean smiley face on it....

If one reads the bible(I don't) they would read where Jesus commended people who sold insurance....I don't believe in that shit...but I certainly know insurance is a sleazy business profiting off the misfortunes and the pain of others....

I'd put insurance salesmen a notch below used cars salesmen!

It reminds me of an old Woody Allen movie -Take the Money and Run-

Where Woody commits a crime and is force to do hard labor on a chain gang....then Woody gets punished for something (I forget what) and the worst punishment the chain gang boss can think of, is for Woody is to be sent to the "hole" in the hot sun for sixty days with an insurance salesman (in suit & tie jabbering away telling poor Woody how he needs much more insurance).

That's the way I feel about insurance salesmen!

[alc]

14. choice - employer coverage reduces choice

I can get dozens of different life and auto policies with lots of different options from lots of different companies (even if there are fewer # of underwriters). That's because the insurers have to deal with LOTs of different people. They can't go crazy with rates because individuals will switch if rates go up.

Health insurers have to deal with significantly fewer employers and give fewer options. Insurers can jack up the price each year and the employer has to take it or switch providers and annoy/upset all employees. Switching doesn't help much because there aren't a lot of providers and the provider they switch to has been also been raising rates for years so their rates are also unreasonable high.

[ItNerd4life]

16. One big difference, health insurance can't sell across states.

Each state has regulation on what has to be covered for insurance in their state.
I can get health insurance for 30% of what people in New York can get health insurance for because my state
allows us more options and fewer requirements. New York requires the 'cadillac' version of care and that everything is covered.

For example: Pregnancy coverage, mental illness coverage, and drug rehabilitation coverage. Why can't people just choose what they want
covered and what they don't want covered.

[ThomWV]

20. Isn't that the most interesting thing - my question would have been exactly opposite of yours.

I would never ask "Why can't people just choose what they want covered and what they don't want covered." I would question why everything isn't covered for everyone.

[Statistical]

17. Because healthcare can't be insured.

Car insurance or home owner insurance covers catastrophic events that happen rarely.

How often does a car insurance policy need to pay out $20K in costs in a year. If they do it in one year how likely is it they will need to pay $100K a year for next 5 years (like when paying 5 years of treatments for cancer).

You only die once so it is a statisticians dream. You can never make 2 life insurance policy claims.

So as long as life expectancy data is accurate AND I have large enough pool of people I am guaranteed a certain amount of revenue.
Average number of years collecting * Average premium per year = Total revenue collected.

Now based on that if I have a diversified low risk investment system that earns x% then all I need to know is revenue collected + gains of x% for y years >= payout amount. If is possible for a life insurance company to make good money and provide an actual service of a guaranteed payment to survivors. It is a win-win.

Nothing like that works for health care. Health care should be a right. Period.

[lefthandedlefty]

18. I don`t think auto insurance works that great either

[sandnsea]

19. I've had problems with auto insurance

Lots of problems. The difference is, if they don't pay, I don't die.

And there are problems with life insurance too. We just had to fight to get my uncle's life insurance to pay. But again, if they don't pay, it's only money. Nobody dies.

[abumbyanyothername]

22. I wouldn't be so sure

especially on the property and casualty side. Remember the fights that hurricane victims had as to whether their damage was wind (storm) - and covered -- or flood - uncovered?

Insurance companies are profit vehicles. Their goal is to take in as much money as possible and pay out as little as possible. They do this through deceptive practices to the extent that they can get away with it.

[Cleita]

23. Life insurance is a cash cow for insurers. They gamble that people

will pay into life insurance most of their lives more than they will ever get out of it. Actually, opening up a savings account and putting the premiums you pay into it for a life time will give your heirs much more when you die than buying life insurance. When you buy car insurance you don't plan to get into an accident. insurers count on that to make sure you are a good driver. When you get health insurance you have no way of not getting sick if circumstances beyond your control make you ill. It's a given that you will eventually need medical care sometimes in your life and definitely at the end of your life so it's not a good comparison to life insurance and car insurance. Therefore, insurance companies collect money from the healthy and least likely to go to the doctor, while throwing the sick and the elderly under the bus when they become costly.

[DefenseLawyer]

24. Cars have an established value. Homes have an established value.

One can bargain in the marketplace and easily determine how much they are willing to pay to insure a car. If your car is worth $10 grand, you can easily determine how much you will pay in order to be made whole in the event your car is damaged. Also, if the insurance is too high you have options, find cheaper insurance with less coverage or a higher deductible, get a cheaper car, park the car and ride the bus. However, in none of those options do you die an excruciating death. The is no established value that can be placed on health. It is nearly completely elastic. One will pay as much as they can pay and those other options aren't really available. Using a free market insurance model to provide health care is quite insane.

[TexasObserver]

25. For one thing, they can't work on your car for a day and charge you $50,000.