One of the struggles in the American health insurance context is that there are two very different things going on under the same rubric. For people like my family who are relatively healthy and are minimal users of medical services at this time, the insurance that we get through my work is fundamentally a discount shopper’s club card for our day to day concerns. This year even with ER visits for my son’s asthma and a broken wrist for my daughter, we just maxed out our deductible this weekend when I refilled the inhaler prescription for my son. Insurance is, for us, only valuable for unlikely and unexpected scenarios. This perspective is common for most individuals who are insured. They’ll use it for primary care appointments, a few low level prescriptions and maybe an urgent care visit or two. It is a discount buyers club with hit by the bus protection.
Insurance is also a Pareto curve industry in that 20% of the users drive over 80% of the costs. Here, insurance is a very different beast. An individual with epilepsy, or serious mental illness, or significant cardiovascular concerns or multiple sclerosis or any of the other long term chronic conditions have a very different relationship with insurance. Here the question is when will a person hit their out of pocket limit over the course of a year not if. An individual could hit their limit in January if the limit is configured as first dollar deductible spending. If the same limit is configured as a 20% co-insurance, they hit the limit in July instead.
These two populations have some overlap but they are fairly distinct populations with very different needs, and creating a single insurance template does not address either need well.
Ben W in comments last week started noodling towards an interesting thought that is a tweak on a re-insurance scheme advanced by the Kerry campaign in 2004: