Econoclasm Chapter Two, continued: " Insurance "
Health insurance – again I’m using
the term because everybody else does, not because I think it’s accurate – can
work in many ways. One of the most important broad dimensions is how the
benefit gets delivered. ·Indemnity
plans are the most like fire insurance. They pay money when the beneficiary
incurs medical expenses. (The money could be paid to the beneficiary, or
directly to the provider. That doesn ’t much matter.)·Service
benefit plans have negotiated arrangements with providers to pay them a
certain amount for a given service, when it is provided.·Service
delivery plans actually provide the service, in other words a provider
organization is given the premium and then must provide whatever services a
beneficiary happens to need. Health insurance, even in the
indemnity form, is different from fire insurance. We can estimate in advance the
cost to rebuild our houses and replace the contents, and buy insurance for that
amount and no more. For obvious reasons, insurance companies won ’t let us
insure our houses for far more than they are worth. But there’s no meaningful
limit to the medical costs someone might confront. Once you’ve rebuilt your
house, you’re done. But medical expenses may be ongoing for the rest of your
life.Which creates another problem. You
can ’t hold off on buying fire insurance until your house catches fire; it will
only pay for costs incurred after the policy is in effect. But in principle,
you could wait until y...
Source: Stayin' Alive - Category: American Health Source Type: blogs
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