You read the title correctly. Insurance is probably the biggest lie perpetuated on the public since the flat-earth crowd. Consider in the US, where the masses have been using and abusing insurance for more than a hundred years. On its face insurance looks like and sounds like a perfect solution. The cost of health care for example, is very high. One would argue that by having health insurance, you reduce your expenses, particularly in a catestrophic event, and thus reduce your overall exposure to financial risk in the process. It seems so good, how on earth could it be bad? Well, consider that insurance companies are not independently wealthy, their wealth comes from the premiums paid to them by subscribers … like you and I, and our respective employers if we are so lucky as to have them subsidize our premiums.
Insurance companies are in business to make money, and as such, the premiums that must be collected from the subscribers must always be higher than the monies paid to health care providers for your care, regardless of whether it is for a $40 prescription or a $150,000 heart transplant, plus associated future medical care. It isn’t difficult to imagine then, that given the cost of health care, we just can’t afford it.
So, what is the answer? Well, I didn’t say I had the answer, I only said that insurance as we know it is a big lie … if the associated health care costs are not affordable, then the insurance to cover that health care, by the sheer nature of the beast, cannot be affordable either. The prospect, while pretty on the face, is unsustainable. In 2007, the average cost spent per person in the US for health care was $7600. Therefore, to make things equitable for every man, woman and child to receive benefits, (i.e. be able to go to the doctor for whatever ailment they had), a family of 4 would have had to contribute $30,400 to the insurance pool in 2007. Since it is obvious that most people can ill afford to pay the premiums under these circumstances, it stands to reason that the health insurance companies’ betting that you will not need health care is a winning one. The question then is, if the insurance companies don’t think you will need health care, or at least they don’t think the masses will need it, why have we, as a society put so much emphasis on the dire need of health care? The answer once again is with the insurance companies. The top 25 insurance companies in the US spend $1.5 billion annually telling people how much they need their product. So their job is to convice you that you NEED their product, while betting that you don’t.
I don’t have health insurance. It is a calculated risk I take. If the insurance company believes I don’t need their product, then why should I believe them when they tell me I do? It doesn’t mean that I forego health care … far from it. Consider that my total health care premium for 2007 would have been $15,200.00 just for me, not including my family, based on a group rate from my employer. On average that is $1267 per month for health care. I would find it very difficult to expend that amount of money monthly on my health care alone. In fact, if I went to see the doctor weekly, I would spend on average $260 per month without health insurance. Most people visit the doctor much less than that, in fact, I have been to the doctor exactly 3 times in the last 2 years. Once for a full physical, required by an organization I was working with, once for a blood test, and once for the results of those tests. I could not begin to tell you how upset I would be had I spent $30,400.00 to an insurance company to provide $295 in services. If you think health care is expensive, try looking at the true cost of your insurance. I did, and I said “No thanks”. I’ll pay for my health care costs as I incur them, and I will keep the remaining $30,000 in a savings account in case I need catestrophic care.