Gone4Good
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Sep 9, 2005
- Messages
- 5,381
Interesting. Do you know of any data I could review that would bear this out?
If this is the case, it's a market failure . . . .
Perhaps not.
With a low deductible plan, you're combining coverage of routine and predictable expenses with coverage for large unpredictable ones. If we broke this policy into two pieces, the routine coverage portion would have fairly low margins whereas the catastrophic coverage would need to have high margins to compensate for the greater degree of risk and uncertainty. HSA plans act more like the second half, so it makes sense they'd have higher margins than a policy including both pieces.
That isn't to say that the individual health insurance market is competitive, it mostly isn't. One reason is the huge switching costs involved. If I'm not healthy, I can't switch at all. If I am healthy, I have to go through the entire underwriting process again, which means putting together at least 5 years of medical history for every company I want a quote from.
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