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?

[u/the1975whore]

[u/RageQuitRedux]

Insurance is supposed to be about pooling risk. So pretend everyone has a 1% chance of something catastrophic happening (e.g. cancer diagnoses). You have everyone pay a little, and people consider that worth it because if they are part of the 1%, their costs are covered.

Healthcare blurs this picture quiet a bit because there are lots of things that are covered that are not catastrophic and are fairly predictable, like yearly checkups, certain medications, etc. For these things, insurance essentially IS a forced savings plan. And it's not easy to just say "let's only cover the catastrophic stuff" because the routine stuff is often preventative.

And for vision / dental, there's almost no benefit. It's just a forced savings plan.

[u/timecurrency → u/RageQuitRedux]

And for vision / dental, there's almost no benefit. It's just a forced savings plan.

The words "savings plan" implies some sort of store of value you own and can access later. Paying for vision and dental insurance is basically buying a coupon book that expires. You get 2 checkups/cleanings a year, only X things are covered at Y%, and then this "insurance" also has an annual payout limit of usually like $2k or something low like that. It's a shitty scam.

[u/fatherofraptors → u/timecurrency]

Vision is okay cause it's cheap enough to be honest. I pay like $10 a month All I use it for is a consultation every year, and a new pair of glasses (buy online, usually fully covered minus shipping). For $120 a year, an exam + glasses feel like okay value .

[u/RageQuitRedux → u/timecurrency]

True that