REAL insurance does not cover problems that are know to exist. REAL insurance covers the RISK of problems that will probably NOT occur. The government-driven conversion of medical insurance into medical service plans is largely responsible for the cost of health care going out of sight. But let me explain the concept of risk-pooling a bit more fully.
I am 52 years old. If I buy life insurance for this year, I am buying insurance that will ONLY pay out in the unlikely event that I die this year. They have actuarial tables that tell them the risk, given my age, non-smoker, history of disease etc. I will only have to pay $100 or so to get like $250,000 in insurance. If I die this year, the insurance company can pay the $250,000 even though I have paid in only a hundred because thousands of other people bought insurance and DIDN'T die. This is called risk pooling. Real insurance is a risk-pooling business that benefits everyone involved.
Another example. I pay a few hundred bucks a year for fire insurance on my home. Chances are, my house will not burn down this year. It will probably never burn down. But if it does, the insurance company can pay $350,000 because, once again, thousands of other people bought fire insurance for their houses that didn't burn down. Risk pooling. This is what insurance is about. If everyone's house burned down every year, fire "insurance" would cost each person $350,000 a year and the fire insurance wouldn't be real insurance because it would cover a cost that was known to occur. Real insurance only works when pooling risks of costs for unlikely events.
Health insurance USED to be real risk-pooling insurance. It covered only catastrophic events. Regular care and the cost of known conditions was not covered because they are not risks, they are known problems. When insurance starts paying for known problems, health maintenance, and voluntary procedures, it is no longer risk-pooling insurance, but some kind of socialized health service plan. And at that point it starts driving up the cost of health care in general because it constitutes a massive subsidy. And the "insurance" itself starts getting very expensive because the policy holders are encouraged to over-consume while providers are encouraged to over-charge.
Government tax incentives and direct legislation on required coverage has turned health insurance into a forced health care subsidy system that has made it nearly impossible to afford health care out of pocket.
The answer is to get government out of health care entirely!
