I guess there are two competing interests here. The MOOP helps to protect the individual from some catastrophic event (financially speaking), kind of the purpose of insurance as you note. The downside seems to be a system that is full of inefficiencies, and likely everyone paying more than necessary (insuring stuff that doesn't need to be insured).malcontent wrote: ↑Thu, 26 Jan 2023 12:49 pmI agree with your sentiments with regard to insurance. It should be a safety net in situations where “self-insure” option is not possible or practical for most people. The biggest problem with this in the Singapore context is that insurance companies are more concerned with protecting themselves than protecting the insured. In the US the insurance companies typically have a MOOP = maximum out of pocket, where anything above that is paid for by insurance, so you can be sure you’ll never pay more than the MOOP. Here it seems to be just the opposite, the insurance companies have their MOOP where they won’t pay anything over a certain dollar limit. For my employer’s medical cover, it is quite pathetic at just $40k, so if anything crazy happens and we get a six figure medical bill… we are on our own.
My contingency plan is to move back to the US and get on Obamacare (if there is enough time) should something happen that requires too many dollars. The problem is, sometimes there isn’t time… and I guess bankruptcy is the only option?
In contrast, the other system with a coverage limit appears to avoid some of these problems (although not entirely and maybe the difference is also the scope of coverage not including everything under the sun), and shift responsibility to the individual (or bear the consequences). Aren't there additional coverages one can buy to get more protection against the rare but extreme outcomes? Lower costs but perhaps some people get put in a really unfortunate spot.
So I guess maybe the MOOP concept itself is fine. The issue appears to be that the consumer is detached from the payment (or pricing), and people negotiating premiums are less sensitive than millions of different consumers actually reaching into their pocket (so to speak).