Even when I added in the cost of servicing aging machines, it was still far cheaper and by an order of magnitude. The warranty programs were obviously a form of insurance, but, up until that point, I had never sat down and considered the true “cost” of maintaining that insurance. I would wager that health insurance, philosophically speaking, is exactly the same.
It is. The financing for a ‘warranty’ program is done by the company taking out an insurance policy. It is much like those lifetime warranty auto parts (lifetime guarantee). These days, it doesn’t mean the part is better.. just that there is an insurance policy against it. When you get an auto part, next time get them to pull the part with the lifetime warranty as well as the mid priced part without the warranty.. and set them side by side on the stores counter and inspect them. They tend to be identical. The biggest cost to me, if I do any auto repairs, is the time and effort to do the repair (dismantling a good portion of the engine to get at the part and remove it). These days, I look for the parts that have the best ‘structure’ and am willing to pay a bit more. ‘structure’ is hard to define. My background is in engineering, so I look for one that is engineered well, with good materials, good quality machining etc.
Now that I went OT on auto parts, it is also the same for health insurance. With insurance, you put a business between you and your doctor. The business wants a profit. The bill to the doctor has to be paid either way…
All that insurance is really set up to do, is reduce risk. This would be the risk that one BIG health issue would wipe you out. This is because insurance works by distributing the risk over many people.
