You just think you do. The Baseline Scenario offers this great post explaining that what most people are buying to protect them from unexpected health crises fails to meet the definition of insurance:
The point of insurance is to protect you against unlikely but damaging events. You are generally happy to pay premiums in all the years that nothing goes wrong (your house doesn't burn down), because in exchange your insurer promises to be there in the one year that things do go wrong (your house burns down). That's why, when shopping for insurance, you are supposed to look for a company that is financially sound - so they will be there when you need them.
If, like most people, your health coverage is through your employer or your spouse's employer, that is not what you have. At some point in the future, you will get sick and need expensive health care. What are some of the things that could happen between now and then?
- Your company could drop its health plan. According to the U.S. Census Bureau (see Table HIA-1), the percentage of the population covered by employer-based health insurance has fallen every year since 2000, from 64.2% to 59.3%.*
- You could lose your job. I don't think I need to tell anyone what the unemployment rate is these days.**
- You could voluntarily leave your job, for example because you have to move to take care of an elderly relative.
- You could get divorced from the spouse you depend on for health coverage.
For all of these reasons, you can't count on your health insurer being there when you need it. That's not insurance; that's employer-subsidized health care for the duration of your employment.
I'd actually go a step farther. I recently had lunch with someone who works in the insurance industry, yet supports a single-payer system. He argued that insurance tools can't be used to address health care costs, because there's no way to accurately estimate the cost exposure. Nor do we as consumers really have any idea what our policies cover.
For example, do you know if your policy covers blood tests? How much does it pay? And does that payment vary if the blood test is done by one of the doctor's staff or by a lab technician from an outside lab? What if the lab work is sent to a nearby hospital for analysis? What if its sent somewhere else? Would you even think to ask these questions before they stick you?
Most of us go to the doctor and then wait for the bill to come in to see how much our insurance pays. It's like Vegas with needles.
Many people are opposed to reform because they don't realize that what they have now isn't insurance. So rather than fixing the broken system, we cling to it and hope that lobbying by insurance companies will somehow make it better. Insurers, of course, are happy to profit at our expense.
Disclosure: no positions