A lot of people don’t understand the real purpose of health insurance or how it should be used. Many want both the lowest possible copay and the lowest premium. From there it tends to be a fairly short journey into the swamps and bogs of needless complexity and mindless regulations.
On the other hand, what people want–or at least theoretically should want–is simplicity and control. Imagine the mess that things would be if car insurance was like traditional health insurance. You would have a copay every time you bought new tires or had the oil changed. And you might have a list of shops that you had to choose from. That’s not why you buy car insurance. Its purpose is to help you financially when you have an accident and need a significant amount of money to repair or replace your car.
So here’s a novel idea–why don’t we make health insurance more like car insurance? That means relative simplicity, no copays, and a single deductible amount.
Health insurance like that actually exists. And that brings us back to the beginning of this post.
Most people don’t think of it like this, but the purpose of health insurance should be to protect whatever assets you may have built up. It does that by providing you access to a pool of money that you can use in certain situations. Health insurance should not be used to cut down on the cost of each little doctor’s visit, but rather as a tool to use in case of emergency and catastrophe.