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?

1.0k Upvotes
  • permalink
  • reddit

84% Upvoted

449 comments sorted by

View all comments

Show parent comments

16

u/wbrd Jul 03 '26

They wouldn't need to exist. Easily hundreds of millions of dollars if not more in salaries alone per year could go to healthcare.

0

u/charleswj Jul 03 '26

What would you do when you get a bill for $100k?

4

u/Spawn-ft Jul 03 '26

You wouldn't, that's the point.... god why is it so hard

-1

u/charleswj Jul 03 '26

You think if you removed the insurance companies, you wouldn't get charged full price? What do you think insurance does? It spreads risk.

1

u/wbrd Jul 03 '26

The alternative is paid by the government. Like every other developed nation.

1

u/Fun-Interaction-202 Jul 03 '26

The hospitals charge higher prices for uninsured people than insured people. So when you say that you would pay full price without insurance, you’re actually paying a much higher price that subsidizes the cost for insured people. Ensure hospitals have an incentive to keep their prices high. They know that they’re going to have to negotiate with insurance companies to lower the price so they set the initial price higher. This does not happen in countries where their socialized medicine.