[quote=flu]My understanding of how this works is the following. The “premium” one pays at a company is just a fraction of the cost of the insurance payments to ensure that person. The other part which is the larger of the two are is the 75%+ portion comping from the company itself. So doesn’t insuring one more person, just cost the company providing the insurance more…If so, do companies really just eat the cost or does it really just pass the cost on down to everyone else with higher premiums? (I think it’s the later, judging by all the letters I’m getting from our benefits office)…[/quote]
Assume I’m a young, healthy student, and my parents have been paying $200/month over 4 years to have me on their insurance policy while in college. I never once went to the hospital or made an insurance claim. Where did that $9,600 go? It went to pay claims of people in the pool who did file claims. Now what happens if you add 2 million students with the same parameters to the pool? There’s an extra $19,200,000,000 to go around. Granted, some of those 2 million new young subscribers will file claims, but certainly not $19bln worth. Unless we’re also adding 2 million additional older subscribers who file lots of claims, it seems to me the math works out as beneficial to bring more younger people into the pool.
