How close to what you pay for health insurance do you actually get out?
Dear Bean Counter,
In a perfect year, zero. That would mean that my family and I needed no care, tests, or drugs. We had perfect health, in other words. There are no perfect years, of course. In a normal year with doctor’s office visits, drugs, and routine tests, we still don’t “get out” nearly as much as we pay.
Health reform requires insurers to spend 80% of the premiums they receive on medical services and quality improvement programs. (It’s 85% for large employer groups.) This applies to their whole book of business, not to individual people. If the insurer has spent less than the target amount on medical care, they have to give customers refunds. Customers did get refunds a few years ago.
The point of having health insurance is not to get back all that you pay in, at least not in any particular year. You might be a bargain for the insurer for several years, and then have a heart attack or a head injury. In that year, you “win” much more money that you ever paid in premiums.
In short, if you want to get all of your health insurance premiums back, aim for having poor health. It seems like a hard way to get a good deal, but that is the way the numbers work.