4b. XVP Health Insurance
Date: Wed Jan 28, 2009 3:17 am ((PST))Pardon the "rant", but the subject is noted as XVP.
First, why is medical insurance something that is a part of one's employment?
My employer
is not responsible for my auto insurance nor my home insurance nor my life
insurance.Second, we seem no longer to have "health insurance", but "pre-paid medical
plans"?Any opinions.
I always have opinions, just not necessarily correct information 
As I understand it, medical or health insurance was first negotiated as a benefit of employment by the unions when they were powerful. I don't know why they picked that benefit, or retirement plans, but presumably because people couldn't afford their medical bills (even though they were quite modest at that time compared to present day), at least not those who were working as laborers and joining unions. They also went for wages and job security, and they easily could have gone for auto insurance, provision of transportation, or just about anything else that the union members would have valued at the time (most probably didn't own cars when the unions were coming into power).
Anyway, some employers DO provide some of these other things - if they're somewhat job-related. If you drive a lot for the company, you may get a car with the associated insurance, and if they move you around a lot, they may cover costs of moving and perhaps even losses on sales of homes (but interestingly, probably not home insurance).
As for whether it's "health insurance" or a "pre-paid medical plan", there's no way to insure your health (unfortunately). We (should) buy insurance to pay for things that we can't reasonably pay for ourselves if they happen to us - that's why some people don't get collision coverage (only liability) for their junker cars - not worth it to them. I no longer carry dental insurance because the premium was high, and most of the dental expenses I incurred were not covered by the insurance, so I figured I was ahead by keeping the premium and paying the bills (the ones that were not covered by the insurance are still the expensive ones unfortunately).
Most people find that getting anything more than routine health care is beyond their means, so they buy insurance - which often provides coverage for the parts they can already afford, like preventive care, simply because the insurers have learned that encouraging such care reduces their bigger expenses by keeping people healthy (this has gone thru cycles over the years, with some things like preventive care going from discouraged to encouraged - having surgery as an outpatient went thru these cycles too, including surgery in the physician's office - covered routinely to not covered to covered again).
Like any insurance, insurance for medical care can be structured in a lot of ways. In order to assure a good share of the market, many physicians, hospitals, and other facilities agree with an insurer (usually several) to be "preferred providers", which means they agree to take reduced fees in exchange for being one of the "approved" providers, meaning the insurance will pay them the agreed-to reduced fees in full or with a small co-pay by the insured, as opposed to "out-of-plan" providers who are covered either not at all, or at a reduced rate and with a higher co-pay by the insured. But if you pay enough premium, you can still get coverage for most of your medical expenses at the provider(s) of your choice. Like everything you purchase, it's all in how the deal is done, and it's complicated enough that most of us find analyzing the alternative plans pretty overwhelming.
There ARE some "pre-paid" plans where you can pay a fixed amount in advance and in exchange they agree to give you ALL the medical care described in the contract with a small or no co-pay. This is still just another form of insurance. The "pre-pay" is the premium.
It's just words; the concept is the same.
--BG
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