i dont know but dont ask the question too loudly, they may hear you and institute this. you would end up paying the deductible even in yrs when you make no claims.
yeah but shouldn't a portion if not all of your monthly payment go towards paying off your deductible, would that be a good thing for the consumer?
Your premium is calculated based on the amount of risk the insurer has taken on by insuring you. The deductible shifts some of the risk back to you and drives down your premium. I guess the answer to why your premium doesn't reduce the deductible is because the reduction is already priced in.
but if you pay month after month after month, and nothing happens, no dr. visits, nothing, you don't even come close to meeting your deductible you are just throwing money away, then when something does happen, they don't give a damn how long you have been paying your monthly premium, you haven't met your deductible, so in order to get full coverage at the best possible rate, you have to be sick all the time, and by the time you get it paid off, hell the year is over and it starts all over again. Seriously that doesn't seem messed up to you guys? Or even having your premium or 50% or however much % of your premium going into your own medical fund, kind of like 401k. I don't know, i am just talking out of my ass, but that just doesn't seem fair.
please by all means explain it to me. because basically as i understand, i basically pay a company money in case something happens to me. If nothing happens, i am throwing money away. When something does happen after years of nothing happening, my premium goes up regardless of how much money i have already put into this company. I understand how it works, what i don't understand is why it is like it is. You can give me the comparison of auto insurance, but human beings are big pieces of metal and plastic. Lets say, i pay 200 bucks a month for my premium. I go 5 years without **** happening. I have already paid this company 12,000 dollars. I start pissing blood, and go to the doctor and i have a kidney stone. The total bill for kidney stone, with the hospital and everything runs 10,000 dollars. This company doesn't care that i already put 12 g's into them, over 5 years, now i have to meet my deductible, which is probably around 1 grand, and then they pay for it, and now i have to pay them 300 dollars a month. What the ****, how is that even remotely right?
Insurance is based upon "the law of large numbers". For every person like you and me who dutifully pay premiums year after year and never submit claims, there are others who receive twice as much in benefits as they pay in premiums. It's the very reason Obama says his plan won't work unless everybody is forced to buy medical insurance (despite the obvious constitutional prohibition). Deductibles are basically self insurance on a small scale which help to reduce premiums.
Well, I am tired and not into this, but can't let this go. If you think you are being ripped off by making monthly payments for coverage, then cancel your insurance and "self insure." Big companies and big organizations do that, and it is, in fact, much cheaper than buying insurance....but...You better not have a claim until you have built up reserves. As SabanFan stated insurance is all about BIG NUMBERS of people, spreading the risk AND the purpose of insurance is to insure FOR THE UNEXPECTED. Somehow, in the latter 20th century, insurance has been transformed, at least in the minds of the public, to some kind of payment system. It is not. The insurance company, based on a myriad of actuarial figures will compute how much you are gonna cost a year in healthcare claims (or auto or homeowner). Again, based on big, in fact HUGE numbers, they will know pretty close what the sum of their policies will cost them. They then say, ok, you pay 20% of these costs. So now they have a figure, total cost less 20%. That 20 is your deductible. The lower the deductible, the more your premiums. See? Now, they will charge you about 15% more than this. That covers profit, admin, etc. This is the load. So now you are at Cost -deductible + load. So, each month your premium will equal cost, less deductible, plus load divided by 12 (12 months). Most insurance companies will have a permissable loss ratio of between 83 and 85%...ie, they will pay that much out in claims, keeping the rest for themselves. If you are young and healthy, and non-risk averse, you can cancel insurance and just reserve some money for when you need the money. But..if you do not reserve enough, or your expense comes to soon, you will be in the hurt locker. Now I get to quote the only really useful thing I learned in B-school. "You either eat well or you sleep well." The Health Savings Accounts (HSA)are a means to kinda do this. You pick, you have to, a high deductible plan, which in theory, means lower monthly premiums, and you get to bank a pretty good chunk of money for future claims. If you are healthy and don't need to pay medical expenses, your HSA grows. But, these plans require you pay the first 1000 or so of in the case of family coverage, the first several 1000 dollars a year, out of pocket. Remember, though, the purpose of insurance is to pay for the unexpected, so a family of four or five should expect to have some expenses and should budget accordingly. Now i remember why I got out of insurance management. Hope someone reads this and it helps you understand. hwr
