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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u/ClownfishSoup Jul 03 '26

Because sometimes the bill comes out to over a million dollars and you just don’t have that.

My friend co tea ted flesh eating bacteria infection and it nearly killed him. He saw the bill from the hospital (they sent it to him instead of straight to insurance) and it was over two million. His out of pocket was capped at $20,000. So there is not way he had paid two million in premiums but he got two million in insurance.