Author Topic: Mustachians Deserve Group Health Insurance Outside Traditional Employment Option  (Read 6588 times)

Hikester

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Whether we are talking about the Mustachian community or ABC employer, someone in that pool of people will get drastically sick, that is the definition of insurance, to spread risk. No pool will be perfectly healthy and accident free. But that is not the point. The point is for different groups, other than employers, to unite to negotiate for better rates. This could be state or city based, private groups etc. We still have the issue that employers contribute to the cost of healthcare while these other groups presumably wouldn’t. Other countries get help from their government, but Americans are very opposed to this. We might end up with a two tier system in the future where some states help their citizens and others don’t. Like in different countries but different states. This discussion has been great in producing lots of angles to this issue and been quite enlightening. We are all going to need healthcare sometime in our lives, so we will see what the future holds. Like Mahatma Gandhi said: Be the change you wish to see in the world.”

Telecaster

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Amazon/Berkshire/JPMorgan self-insure their employee health expenses, which means that they only pay the insurance company for administrative benefits, not for taking on financial risk. Despite that and having a combined 1 million employee, the cost savings are currently marginal. Do you seriously think a group of early retirees can get cost savings that multinational corporations can't?

No, but they still might be able to get some savings.  Here's how:  Presumably, many in the MMM community are retired and therefore buy individual insurance plans (as opposed to employer-sponsored).   But a group plan likely would be cheaper than an individual plan. 

The trick would be making sure the risk pool is large enough. 

Paul der Krake

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That’s still going to be a subset of the pool of the individual market. What pricing leverage do you think a group of early retirees has?

Hikester

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Well AARP has a lot of leverage but they are much larger. The FIRE community is still too small.

ChpBstrd

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We might end up with a two tier system in the future where some states help their citizens and others don’t. Like in different countries but different states.

Welcome to the future: https://www.kff.org/medicaid/issue-brief/medicaid-expansion-health-coverage-and-spending-an-update-for-the-21-states-that-have-not-expanded-eligibility/

The U.S. is so crazed by ideology that people can't even make decisions to enact pragmatic solutions to benefit themselves. Rejecting funds from the ACA is exhibit A. It's not that the problem isn't severe enough to force the ideologues into a compromise, it's that we can't even think beyond zero-sum games anymore.

pecunia

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ChpBstrd:
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It's not that the problem isn't severe enough to force the ideologues into a compromise, it's that we can't even think beyond zero-sum games anymore.

Absolutely right - Here there is literally an issue of life and death for citizens of this country and they get caught up in some bizarre abstractions instead of trying to fix the problem.

Of course some of them have simply sold out to big money interests and had no morals or principles to begin with.

Paul der Krake

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Well AARP has a lot of leverage but they are much larger. The FIRE community is still too small.
Does AARP actually have any leverage in the health insurance market? If that were true, why isn't every single senior a member?

Jrr85

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Amazon/Berkshire/JPMorgan self-insure their employee health expenses, which means that they only pay the insurance company for administrative benefits, not for taking on financial risk. Despite that and having a combined 1 million employee, the cost savings are currently marginal. Do you seriously think a group of early retirees can get cost savings that multinational corporations can't?

No, but they still might be able to get some savings.  Here's how:  Presumably, many in the MMM community are retired and therefore buy individual insurance plans (as opposed to employer-sponsored).   But a group plan likely would be cheaper than an individual plan. 

The trick would be making sure the risk pool is large enough.

Having a large enough group to get pricing power is better than the alternative, but that doesn't really change things much.  Healthcare is expensive because we throttle the supply for a necessary service.  We compound that error by having 90% of the costs paid by third parties, with costs only indirectly flowed through to consumers. 

We can't fix it because politically we are focused on making sure other people pay for healthcare and pretending that regulation of a financial instrument is going to significantly change the costs. 

austin944

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Absolutely right - Here there is literally an issue of life and death for citizens of this country and they get caught up in some bizarre abstractions instead of trying to fix the problem.


Fixing the problem is going to require addressing the obesity epidemic in this country.  The USA has the highest obesity rate in the world, and it is expected to get worse in the future.

Why should I have to pay for somebody's health insurance when they refuse to maintain a healthy weight, exercise, or quit smoking?  If you are going to demand that people work together on lowering the cost of health care, then why can't I tell people to quit destroying their health with their bad habits?  It's a two-way street.  Don't reach into my wallet and expect me to demand nothing in return.

Threshkin

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Absolutely right - Here there is literally an issue of life and death for citizens of this country and they get caught up in some bizarre abstractions instead of trying to fix the problem.


Fixing the problem is going to require addressing the obesity epidemic in this country.  The USA has the highest obesity rate in the world, and it is expected to get worse in the future.


Why should I have to pay for somebody's health insurance when they refuse to maintain a healthy weight, exercise, or quit smoking?  If you are going to demand that people work together on lowering the cost of health care, then why can't I tell people to quit destroying their health with their bad habits?  It's a two-way street.  Don't reach into my wallet and expect me to demand nothing in return.

Incorrect.  The US does not have he highest obesity rate in the world.  In fact it ranks 12th as of Feb 2018.

https://www.worldatlas.com/articles/29-most-obese-countries-in-the-world.html

austin944

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Incorrect.  The US does not have he highest obesity rate in the world.  In fact it ranks 12th as of Feb 2018.

https://www.worldatlas.com/articles/29-most-obese-countries-in-the-world.html

The USA has the highest obesity rate among OECD countries, as of 5/2017:
https://www.marketwatch.com/story/the-us-is-the-most-obese-nation-in-the-world-just-ahead-of-mexico-2017-05-19

The top country in your list (Nauru) receives "significant" support from Australia for its health services:
https://www.homeaffairs.gov.au/about/corporate/information/fact-sheets/health-services-nauru

And the second receives aid as well (Cook Islands, receiving aid from NZ):
https://www.mfat.govt.nz/en/aid-and-development/our-work-in-the-pacific/cook-islands/
« Last Edit: June 27, 2018, 09:53:52 AM by austin944 »

ChpBstrd

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Absolutely right - Here there is literally an issue of life and death for citizens of this country and they get caught up in some bizarre abstractions instead of trying to fix the problem.


Fixing the problem is going to require addressing the obesity epidemic in this country.  The USA has the highest obesity rate in the world, and it is expected to get worse in the future.

Why should I have to pay for somebody's health insurance when they refuse to maintain a healthy weight, exercise, or quit smoking?  If you are going to demand that people work together on lowering the cost of health care, then why can't I tell people to quit destroying their health with their bad habits?  It's a two-way street.  Don't reach into my wallet and expect me to demand nothing in return.
Why should I have to pay for the costs of motorcycle accidents when I don't ride?

Why should I have to pay for the costs of eye injuries to welders, when I am not a welder?

Why should I have to pay for the costs of silicosis when I am not a miner?

Why should I have to pay for the costs of people with type 1 diabetes when I am not genetically succeptable?

Why should I have to pay the costs of premature babies when I'm not having any more kids?

Why should I have to pay for the earthquake injuries of people in California when I chose to live in a geologically stable region?

Why should I have to pay for the many, many national parks I will never get to visit?

Why should I have to pay for the higher healthcare costs of the elderly when I am not (yet) elderly?

It is satisfying to set up one mental account for oneself and another for everybody else. It's reassuring to imagine a world where one's own virtues and healthy habits mean nothing could go wrong, and one's insurance premiums are simply charity to the undeserving. But one day we will all need the assistance of other people. Maybe you break a hip in 20 years, or develop an autoimmune disorder, or slip a disc? I know very few people who've never had a bout with some health problem - that's what insurance is for.

Now, if you're talking about huge taxes on tobacco and sugar, I think that makes sense. Candy bars and soft drinks should cost 10x as much as they do. Tobbacco should be taxed until it almost makes sense for the drug dealers to sell.

pecunia

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Austin-944:
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Fixing the problem is going to require addressing the obesity epidemic in this country.  The USA has the highest obesity rate in the world, and it is expected to get worse in the future.

I think so too.  In fact I think fixing it will require a new outlook from the medical industry.  More emphasis should be on prevention and tools should be provided to make it easier for people to maintain their health.  Then it will infiltrate our culture and we will all be better off.

Here's a simple example.  I work away from home and sometimes like to take a good walk.  I'm sort of amazed as to how many places are "boxed in."  You literally cannot take a good walk.  To get from point A to point B, you need a vehicle.  Wouldn't the simple act of people walking go a long way to helping them?

I guess there is a lot less money to be made from healthy people.


Threshkin

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Absolutely right - Here there is literally an issue of life and death for citizens of this country and they get caught up in some bizarre abstractions instead of trying to fix the problem.


Fixing the problem is going to require addressing the obesity epidemic in this country.  The USA has the highest obesity rate in the world, and it is expected to get worse in the future.

Why should I have to pay for somebody's health insurance when they refuse to maintain a healthy weight, exercise, or quit smoking?  If you are going to demand that people work together on lowering the cost of health care, then why can't I tell people to quit destroying their health with their bad habits?  It's a two-way street.  Don't reach into my wallet and expect me to demand nothing in return.
Why should I have to pay for the costs of motorcycle accidents when I don't ride?

Why should I have to pay for the costs of eye injuries to welders, when I am not a welder?

Why should I have to pay for the costs of silicosis when I am not a miner?

Why should I have to pay for the costs of people with type 1 diabetes when I am not genetically succeptable?

Why should I have to pay the costs of premature babies when I'm not having any more kids?

Why should I have to pay for the earthquake injuries of people in California when I chose to live in a geologically stable region?

Why should I have to pay for the many, many national parks I will never get to visit?

Why should I have to pay for the higher healthcare costs of the elderly when I am not (yet) elderly?

It is satisfying to set up one mental account for oneself and another for everybody else. It's reassuring to imagine a world where one's own virtues and healthy habits mean nothing could go wrong, and one's insurance premiums are simply charity to the undeserving. But one day we will all need the assistance of other people. Maybe you break a hip in 20 years, or develop an autoimmune disorder, or slip a disc? I know very few people who've never had a bout with some health problem - that's what insurance is for.

Now, if you're talking about huge taxes on tobacco and sugar, I think that makes sense. Candy bars and soft drinks should cost 10x as much as they do. Tobacco should be taxed until it almost makes sense for the drug dealers to sell.

Very good points above.  Risk pooling groups people with high and low risk for many factors together.  It is really the only way insurance can work.  Statistical predictions hold up much better in large populations.  In small groups the beta is just too high.  This is a good argument for nation-wide mandatory single payer insurance because it creates an extremely large risk pool.

Funny thing abut your last point, In some US jurisdictions, Tobacco is already taxed to the point where it is profitable to sell it illegally.  Do a quick search on Illegal Cigarette Sales and you will find a lot of news reports.  NYC in particular seems to have a big problem with this but it is not the only place.

austin944

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Very good points above.  Risk pooling groups people with high and low risk for many factors together.  It is really the only way insurance can work.

You can have different pools with different levels of risk in each pool.  Auto insurance works that way, and Obamacare allows insurers to force smokers to pay higher premiums.   These risk factors can be based on an individual's behavior.  If you choose to drive through red lights or choose to begin smoking, you get charged a higher insurance premium.

But if you choose not to maintain a healthy weight, you're charged the same health care premiums as everybody else.  That provides no incentive for people to make healthy choices, and it will never address the growing obesity epidemic in this country and its associated health care costs.

Threshkin

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Very good points above.  Risk pooling groups people with high and low risk for many factors together.  It is really the only way insurance can work.

You can have different pools with different levels of risk in each pool.  Auto insurance works that way, and Obamacare allows insurers to force smokers to pay higher premiums.   These risk factors can be based on an individual's behavior.  If you choose to drive through red lights or choose to begin smoking, you get charged a higher insurance premium.

But if you choose not to maintain a healthy weight, you're charged the same health care premiums as everybody else.  That provides no incentive for people to make healthy choices, and it will never address the growing obesity epidemic in this country and its associated health care costs.

Sure, risk pools can be and are broken up by different criteria.  My point is purely statistical.  The larger the pool, the easier and more accurate the overall risk predictions can be.  That is independent of the actual risk rates. 

Insurers would like to keep high-risk people (smokers, preexisting conditions, family history, etc.) out of the pool because that reduces their aggregate risk which improves profitability for the insurer and (hopefully) costs for the insured.

If you create a risk pool that only includes people   The desirable traits you by definition exclude people who don't meet the criteria.  This is good for the people in the pool and bad for the people who are not.  One of ACA's goals was to reduce this injustice by forcing insurers to include more people in the risk pool.  The logical outcome of adding higher risk individuals is to increase the overall risk of the pool which increases costs for both the insurer and the insured. The individual mandate was intended to decrease that risk by forcing low-risk individuals to also join the pool.  Unfortunately for many the tax penalty imposed for not buying insurance was too small to force compliance.  Now, with the mandate gone the situation is even more acute.

The subsidy program in ACA attempted to mask the true cost of insurance by transferring part of the costs from the individual to the taxpayers but the actual cost was still there.  The limitations on insurer profits were also intended to reduce costs but they did not address the pass-through costs from the service providers.  The profit controls made it less desirable for insurers to participate in ACA resulting in limited coverage options.  It also was a significant factor in the demise of many exchanges.

The revisions to medicare and medicaid were some of the best parts of ACA because they did attempt to control service provider costs.  Unfortunately those cost controls did not extend beyond those programs.

Concojones

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In response to this whole thread:

Healthcare options have always been available, even outside of your employer. The problem is the often prohibitive cost. So what we need is reasonable healthcare costs rather than a mustachian group policy. How do we do that?

According to Harvard:

- US healthcare costs twice what it costs in other rich countries
- the difference is due to inflated prices across the board (salaries, drugs, ADMINISTRATION). I put ADMINISTRATION in CAPS because if you read the article carefully, this item alone explains the cost difference between the US and other countries. I'm disappointed that they didn't care to specify what exactly they mean by 'administration'.
- Obamacare doesn't address the root problem (cost!)

Looks like we have 2 options:
1. Get rid of layers of administration and design a new system, which could be great (in theory) or (if Obamacare is any guide) subpar for the foreseeable future.
2. Simply copy the socialized healthcare system of just about any other country. It won't be perfect, but it's better than what we have now, and it's immediate relief.
« Last Edit: June 28, 2018, 03:25:30 PM by Concojones »

pecunia

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ChronicJones:
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Looks like we have 2 options:
1. Get rid of layers of administration and design a new system, which could be great (in theory) or (if Obamacare is any guide) subpar for the foreseeable future.
2. Simply copy the socialized healthcare system of just about any other country. It won't be perfect, but it's better than what we have now, and it's immediate relief.

OK - You can go for option 1 which is undefined or go for option 2 which works elsewhere.  Hmmmm.  Try something vague and undefined or something that is shown to work. 

How about an option 3 where we ease our way over to option 2?  It will be a hard sell to get the politicians to abandon their supporters, i.e. the health care industry.  You may be able to chip away at the system by improving Obamacare and maybe opening some Federal clinics staffed by medical personnel who have been given scholarships for say 7 years of supporting said clinics.

DreamFIRE

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Yeah, improve Obamacare, and improve Medicare.  Seniors shouldn't have to pay so much out of pocket.

If we can't get those existing systems stabilized and affordable, I can't see anything more global ever working out successfully.

pecunia

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Dreamfire:
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If we can't get those existing systems stabilized and affordable, I can't see anything more global ever working out successfully.

Have you ever considered that the people in charge do not want to fix these programs?  These are the same people that almost eliminated the healthcare for millions.  These are the same people that talk about "reforming" Social Security.  These folks love the profit motive and believe market forces can solve all problems.

Have you seen one piece of healthcare legislation come out of these guys that will promote the common welfare?

beekayworld

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Now, if you're talking about huge taxes on tobacco and sugar, I think that makes sense. Candy bars and soft drinks should cost 10x as much as they do. Tobbacco should be taxed until it almost makes sense for the drug dealers to sell.

Good points! And if the government would stop subsidizing corn crops,  corn sugar would not be so cheap that it gets added to almost all foods (e.g. ham, bread, canned soups).  Corn syrup is a carb. The old food pyramid with grains as the base needs to be turned upside down.

BTDretire

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Re: Mustachians Deserve Group Health Insurance Outside Work
« Reply #71 on: August 18, 2018, 08:00:37 PM »
Mustachians pay taxes too. All I am saying is that tying insurance to employment does not make sense.

 I agree, I have not had an employer subsidized health insurance policy since the 80s.
 I had a very happy day back in 2009 when I raised the deductible on my insurance and opened an HSA.
I was paying $4,512 for my family of 4. and getting a deduction on my HSA. Things looked great.
 Then in 2012 Obamacare regulations kicked in and now I'm paying $12,144 for the same family of 4.
When those regs started I had some whoping 18%, 19% and 24% increases in my premium.
  Note: I got those increases when the government started helping.

 

pecunia

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Is there anywhere where a purely market based health care program actually works today?  People complain about government causing costs to rise.  No argument there.  Was the wrong fix applied?

BTDretire

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Is there anywhere where a purely market based health care program actually works today?  People complain about government causing costs to rise.  No argument there.  Was the wrong fix applied?

 I don't know, but in 2017 the percentage of the population that used Obamacare was 3.5%.
 All that trouble to cover just 3.5% of the population.
 The obvious solution is to cut medical expenses.
Then the argument is, "your letting people die!" Or, your killing people.
 So we spend billions to keep people alive another six months.
Here's an article the tells the tradeoffs that I think should be made, but...
https://www.theatlantic.com/health/archive/2017/06/how-we-spend-3400000000000/530355/
It also says the 5% of the population spend 50% of the healthcare money.
EDIT to add,
 This seems helpful.
https://www.theatlantic.com/health/archive/2017/06/fixing-the-5-percent/532077/
« Last Edit: August 19, 2018, 09:03:38 AM by BTDretire »

DreamFIRE

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Dreamfire:
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If we can't get those existing systems stabilized and affordable, I can't see anything more global ever working out successfully.

Have you ever considered that the people in charge do not want to fix these programs?  These are the same people that almost eliminated the healthcare for millions.  These are the same people that talk about "reforming" Social Security.  These folks love the profit motive and believe market forces can solve all problems.

Have you seen one piece of healthcare legislation come out of these guys that will promote the common welfare?

I consider it a fact that those with the most power don't want to fix it.  My point was that if they won't fix what we have, and continue to attempt to repeal or dismantle it, what are the chances they come up with something globally better?

If the Republican healthcare bill would have passed, the CBO estimated that over 20 million Americans would have lost health insurance.

pecunia

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- SNIP -

 I don't know, but in 2017 the percentage of the population that used Obamacare was 3.5%.
 All that trouble to cover just 3.5% of the population.
 The obvious solution is to cut medical expenses.
Then the argument is, "your letting people die!" Or, your killing people.
 So we spend billions to keep people alive another six months.
Here's an article the tells the tradeoffs that I think should be made, but...
https://www.theatlantic.com/health/archive/2017/06/how-we-spend-3400000000000/530355/
It also says the 5% of the population spend 50% of the healthcare money.
EDIT to add,
 This seems helpful.
https://www.theatlantic.com/health/archive/2017/06/fixing-the-5-percent/532077/

.035 X 325,000,000 = 11,375,000  people - Just 3.5 percent of the population.  I guess I'm not one of those collateral damage types of guys.  I don't think they are all going to die in another six months.  Most are probably not sick at all.  They just need affordable health care.  Might be a better idea to spend billions keeping folks alive rather than the:

WASHINGTON—U.S. wars in Afghanistan, Iraq, Syria and Pakistan have cost American taxpayers $5.6 trillion since they began in 2001, according to a new study, a figure more than three times that of the Pentagon's own estimates.Nov 8, 2017

You know if they had some sort of Federal program, they could competitively bid on things like drugs and medical services.  I really don't think the medical companies have a lot of incentive otherwise to lower prices.  The Federal program could possibly eliminate a lot of middle men and this could drive down prices.

"So we spend billions to keep people alive another six months."

Yes - We've all heard stories of people being in a coma kept alive by a machine.  I don't think I'd want that.


- SNIP -

I consider it a fact that those with the most power don't want to fix it.  My point was that if they won't fix what we have, and continue to attempt to repeal or dismantle it, what are the chances they come up with something globally better?

If the Republican healthcare bill would have passed, the CBO estimated that over 20 million Americans would have lost health insurance.

I'm kind of thinking a lot of the present politicians are digging a big hole for themselves.  I figure there will be some new heads in November.  New heads may bring new ideas.  Of course, you don't always hear how bad these guys are because Trump takes all the headlines and this acts as a smokescreen.  Maybe one of the new ideas will be a new kind of group health insurance outside the traditional employment.  People are quite mobile these days and this could solve many problems.

Telecaster

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I'm kind of thinking a lot of the present politicians are digging a big hole for themselves.  I figure there will be some new heads in November.  New heads may bring new ideas.  Of course, you don't always hear how bad these guys are because Trump takes all the headlines and this acts as a smokescreen.  Maybe one of the new ideas will be a new kind of group health insurance outside the traditional employment.  People are quite mobile these days and this could solve many problems.

The problem with that approach is that the group has to be really, really big otherwise a few sick people will drive up premiums and collapse the pool.   One limiting step is that insurance is regulated by the individual states, so everyone in the group also has to be in the same state.

The ACA does allow states to form regional insurance bodies, but no states have done so.   An early version of the ACA allowed for federal regulation, which would have allowed insurance companies to issue polices across state lines, but that was stripped out of the final version. 

beltim

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It also says the 5% of the population spend 50% of the healthcare money.

In any one year.  It's not the same 5% every year.

This is how insurance works.  There's a similar ratio for every kind of insurance - auto, flood, fire - a few claims are responsible for the vast majority of costs.  That's the whole point of insurance.

As an extreme example, consider life insurance - most people never collect it, but no one ever makes two claims on the same policy.

v8rx7guy

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This is similar to how a health share ministry works and they have seemingly incredibly low "premiums".  They are able to take in only members who live a reduced risk lifestyle.  For instance, no smoking, no excessive drinking, no sex outside of marriage, etc. 

flyingaway

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In any one year.  It's not the same 5% every year.

This is how insurance works.  There's a similar ratio for every kind of insurance - auto, flood, fire - a few claims are responsible for the vast majority of costs.  That's the whole point of insurance.

As an extreme example, consider life insurance - most people never collect it, but no one ever makes two claims on the same policy.

Why is this the case? The insured may not collect his/her own benefit, but his/her beneficiaries do.

Paul der Krake

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In any one year.  It's not the same 5% every year.

This is how insurance works.  There's a similar ratio for every kind of insurance - auto, flood, fire - a few claims are responsible for the vast majority of costs.  That's the whole point of insurance.

As an extreme example, consider life insurance - most people never collect it, but no one ever makes two claims on the same policy.

Why is this the case? The insured may not collect his/her own benefit, but his/her beneficiaries do.
Most beneficiaries never collect it... this is why you can buy 1 million for $20 a month or whatever.

seattlecyclone

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In any one year.  It's not the same 5% every year.

This is how insurance works.  There's a similar ratio for every kind of insurance - auto, flood, fire - a few claims are responsible for the vast majority of costs.  That's the whole point of insurance.

As an extreme example, consider life insurance - most people never collect it, but no one ever makes two claims on the same policy.

Why is this the case? The insured may not collect his/her own benefit, but his/her beneficiaries do.
Most beneficiaries never collect it... this is why you can buy 1 million for $20 a month or whatever.

Right. Life insurance is mostly purchased by younger people, with lower savings, kids to provide for, etc. As you age, premiums go up and the need for life insurance goes down, so not all that many people actually still have life insurance by the time they pass away.