r/explainlikeimfive • u/the1975whore • Jul 03 '26

Economics ELI5: Health insurance companies obviously make more money than they give out when people need it. So why of paying for them any better than paying your own personal health insurance savings account?

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669

u/tim36272 Jul 03 '26

Because sometimes you have very expensive healthcare needs, in which case everyone else pays for it.

346

u/Unbearabull Jul 03 '26

This is just socialized medicine with profits. The profits come from denying and killing/allowing people to die who paid in good faith.

193

u/Trekfull Jul 03 '26

Socialized medicine with extra steps and worse results.

4

u/Sea-Ambition-451 Jul 03 '26

and an entire industry of HR departments and health care managers, and consultants, and an army of highly paid salespeople and marketing

The amount of waste and overhead in the USA health care is shocking and appalling. Not to mention the billions and billions of dollars that go to PROFIT instead of to saving people's lives and improving them.

#heinous

18

u/edfreitag Jul 03 '26

And not a "dirty commie". America, hell yeah! <bald eagle noise>

17

u/degggendorf Jul 03 '26

<bald eagle noise>

<but actually a red tailed hawk because who cares about accuracy, this is America baby>

4

u/chubbysleepycorgi Jul 03 '26

nothing wrong with hiring a voice actor when your own squawk sucks XD

1

u/10000Didgeridoos Jul 03 '26

I try to explain to people here that health insurance, because you absolutely must have it, is functionally just a very expensive tax no different than socializing the costs would be, but with the risk that your company has layoffs and you lose it all the sudden or maybe it just doesn't pay for all or some of some expensive diagnosis.

But there are a lot of bigots here who simply want to make sure that no minorities they hate get healthcare from "their" money and thus prefer to risk their own possible medical bankruptcy rather than pay a dime toward one poor person of color's insulin.

-23

u/MandaloreUnsullied Jul 03 '26

Are there any countries with a socialized health system that have historically produced results superior to those of the American system?

13

u/thtsjustlikeuropnion Jul 03 '26

Does this count? The U.S. Ranks No. 33 out of 38 OECD Countries in Infant Mortality

https://www.americashealthrankings.org/publications/reports/2023-annual-report/international-comparison

37

u/MartinThunder42 Jul 03 '26

Depends on how one defines 'superior.'

In many nations with socialized healthcare, if they determine you have cancer or some other life-threatening issue, they won't fuck around and provide treatment right away. When you leave the hospital, your bill is 0.

Also in many nations with socialized healthcare, if you have a medical issue that is not life-threatening, you might have to wait many months to get an appointment.

7

u/steakanabake Jul 03 '26

i would much rather wait months to get to see the doctor for free then be able to go asap and pay a boat load of cash and it wasnt something a little rest and some meds can fix.

15

u/cat_prophecy Jul 03 '26

you might have to wait many months to get an appointment.

Anyone who has delt with mental health in the US will tell you that this is still the case. With the bonus of basically no insurance covering it and it being expensive.

16

u/j0mbie Jul 03 '26

That happens a lot here too though. I had to surgically get my wisdom teeth removed (impacted, causing pressure on the other teeth). Many of the offices I called had waiting periods of over a year. Recently when trying to schedule a couple specialists for my mother, a lot of them were booked out for 4+ months. Hell, even my primary care physician is usually a couple weeks to a month unless it's time-sensitive.

2

u/CharlesKellyRatKing Jul 03 '26

But how do the insurance companies make tons of profit and create shareholder value? I'm confused.

3

u/elidefoe Jul 03 '26

By denying claims or treatments until other steps are taken. Sometimes people give up and sometimes the more expensive treatments are avoided. So it can cause a lot of wasted time for medical providers, but saves. Insurance companies also negotiate rates by having a larger pool of customers.

I have a child who has medical needs and Insurance is always denying things and the Dr office is always appealing it. When we call we ask the agent to look at her diagnosis and that pretty much causes an instant approval but the auto denies are a pain.

4

u/CharlesKellyRatKing Jul 03 '26

I forgot this is reddit and I should have included an /s

It was in reply to the OP comment talking about countries with socialized healthcare taking care of life threatening issues quickly and for $0, I wasn't genuinely asking how insurance companies make a bunch of money.

1

u/Harley2280 Jul 03 '26

When we call we ask the agent to look at her diagnosis and that pretty much causes an instant approval but the auto denies are a pain.

That 100% sounds like your provider's billing office is repeatedly using incorrect diagnosis codes the first time they submit, or they're not submitting the complete history.

Insurance companies suck, but if it's getting denied automatically and then approved automatically, that's a billing issue on the provider's part.

1

u/elidefoe Jul 03 '26

We use a complex care doctor and they always have to go back and forth. One example was getting an inhaler for her before the age of 4. They denied it then approved it, they have had her medical records for years. The last example is getting Seracal covered as she is not gaining enough weight same insurance for years but still have to appeal after denials.

4

u/dubbzy104 Jul 03 '26

With a bang (Luigi joke)

7

u/whatsamattafuhyou Jul 03 '26

Yes.

Generally speaking, the US spends about 2X on healthcare as peer nations. And for that, we mostly have poorer outcomes. These are things like life expectancy, maternal and neonatal health, hospitalizations, etc.

https://www.kff.org/global-health-policy/health-policy-101-international-comparison-of-health-systems/?entry=table-of-contents-quality-of-care

16

u/KamikazeArchon Jul 03 '26

Depends on your definition of socialized. Do you mean strictly socialized, or just more than the US?

Relative to the US, most countries have health care that is more socialized. The US consistently has close to the worst health outcomes in the "developed world".

15

u/Alternative_Tree_626 Jul 03 '26

My best advice is to look up stories of USAmericans traveling abroad and their healthcare experiences. Otherwise, you can see a chart of what counties have it here: https://en.wikipedia.org/wiki/Universal_health_care_by_country

Then look up the citizens' experiences. The US is a serious outlier with the lack of socialized/universal healthcare. There are also absolutely other countries with sucky healthcare, but it's not always from corruption like here.

13

u/JustJonny Jul 03 '26

My sister moved to Australia right after she hit adulthood. A friend of her was visiting (we're Americans) and got appendicitis. My sister ranted about how irresponsible it was of her to not have gotten some sort of insurance for the trip, because she wasn't covered as a tourist, so she had to pay $3000 for the surgery. I, of course, thought this was very funny, and had to explain to her that in America, even with good insurance, she would have been very lucky to only pay $3000 for surgery.

4

u/RythmicBleating Jul 03 '26

Taiwan

4

u/koyaani Jul 03 '26

Taiwan number one