M Paquette
Moderator Emeritus
Yup.What people don't understand.. or refuse to understand.. is that most of the junk policies were not insurance at all. They were just one-way payment arrangements. Every year, the insurance companies would decide whether the next year they would rather take your money or pay for your medical services. In the mean time you are older by a year with all the ailments that come with steadily marching steadily towards your body's use-by date, and the insurance companies are that much richer.
I've mentioned the Mega-Life and similar 'medical policies' sold on college campuses before. Many private schools required the students to buy one of their plans, even if the student was covered by a parent's plan, giving reasons like 'it's the only plan the campus clinic takes'. These were offered at a huge range of schools, from the local community college to Ivy League institutions. The plans had a payout rate (the portion of premiums spent to cover medical expenses of the insured) of under 15%. Yes, 85% of the premiums went to 'operating expenses' and profit. The plans had awesome coverage. No coverage for cancer. No coverage for treatment of chronic illness. No coverage for prescriptions. Hospitalization and emergency room expenses had a lifetime cap of $2,500.
Great stuff. DD was required to buy one of these plans. And the rates were pretty low, around $80 a month. Such a deal.