I remember asking mom what 'insurance' meant--I was reading a short-story, and the character was worried about the Insurance Man coming around when she had no money. What was that all about?
Mom said well, if you have some disaster happen, something that costs a lot, most people don't have extra money around to pay for it. (We sure didn't). So, the idea behind insurance was to have everybody pay a smaller affordable amount every month when things were good...then, if there's a problem, the money to pay for a roof, or fix a car, or go to the hospital would be there....because everybody was paying into this fund. You had to make a claim and prove you needed the help, but that was the way it worked. If you were lucky, you'd never need it.
In the story, the woman needed fifty cents for the Insurance Man. I knew that that wasn't much--but she lived in a tennament in New York in 1900. I asked mom what we paid for insurance....and mom being mom, she wouldn't say...but I could tell it worried her, too.
I asked what happened to your money if you never needed it? Well, that was just the cost of having it, she said...you were buying 'peace of mind'. I thought that was a bad bargain,and pretty unjust, and I still do.
For instance, if I paid, say, $100 every month from the time I was 20, that would be $48,000 by now. And, if everybody paid that $100 every month......over years....then there's a huge pool of money somewhere, no matter how many claims have been made.
The current "health care" debate in Washington seems to me to be so much smoke-blowing. Like the syndicate in 1900s New York who extorted money from the woman in the book, the "insurance" companies are making massive amounts of money, and telling us they can't afford to pay for claims.
What's wrong with this picture?