Health Insurance EV question
 

Not sure where to post this. People say that it's -EV to have health insurance but +utilityEV or something along those lines, basically it's -EV but it will help when you really need it b/c it'd be too costly. Can someone estimate the appropriate bankroll you'd need to not want health insurance.

Re: Health Insurance EV question
 

Depends on age/health.

Re: Health Insurance EV question
 

Not having health insurance is probably one of the dumber ideas out there.

yeah, there is a chance nothing will happen, but no one knows when they can suddenly get sick. The medical bills could easily wipe out your bankroll 10 times over.

Re: Health Insurance EV question
 

A bankroll concept doesn't apply to this. A bankroll is a way of insuring against the risk of ruin. Theres no income generation in not having health insurance so there is no bankroll, nor ROR, in the way we think of it. There's no variance to limit.

I would think 40k would cover most costs.

Re: Health Insurance EV question
 

[ QUOTE ]
Depends on age/health.

[/ QUOTE ]21, mostly fine, slightly high blood pressure.

[ QUOTE ]
Not having health insurance is probably one of the dumber ideas out there.

[/ QUOTE ]Are you saying Bill Gates would be dumb if he did not have health insurance? There's obviously some income level you can have where health insurance becomes dumb to have, I'm just wondering what that point that is.

[ QUOTE ]
A bankroll concept doesn't apply to this. A bankroll is a way of insuring against the risk of ruin. Theres no income generation in not having health insurance so there is no bankroll, nor ROR, in the way we think of it. There's no variance to limit.

[/ QUOTE ]Isn't the ruin you going broke because you can't afford the cost of a certain medical operation? The variance is like let's say you only had 25k to your name....health insurance covers everything from pills ($100) to mild surgery ($10k) some open heart surgery ($50k) or something like that...so the variance is you're not properly bankrolled to handle open heart surgery? See what I'm saying?

Anyways I have no idea what anything costs or what I could expect to pay if something would happen.

Re: Health Insurance EV question
 

I thought the same thing before, health insurrance is -EV and only necesary for those w/o a large enough BR. However, this fails to take into consideration the power that health insurrance companies have in negotiating lower rates. So their rake is mitigated.

Re: Health Insurance EV question
 

[ QUOTE ]
[ QUOTE ]
Depends on age/health.

[/ QUOTE ]21, mostly fine, slightly high blood pressure.

[ QUOTE ]
Not having health insurance is probably one of the dumber ideas out there.

[/ QUOTE ]Are you saying Bill Gates would be dumb if he did not have health insurance? There's obviously some income level you can have where health insurance becomes dumb to have, I'm just wondering what that point that is.

[ QUOTE ]
A bankroll concept doesn't apply to this. A bankroll is a way of insuring against the risk of ruin. Theres no income generation in not having health insurance so there is no bankroll, nor ROR, in the way we think of it. There's no variance to limit.

[/ QUOTE ]Isn't the ruin you going broke because you can't afford the cost of a certain medical operation? The variance is like let's say you only had 25k to your name....health insurance covers everything from pills to some open heart surgery or something that range is like $100-50k or something, right?

[/ QUOTE ]

Ok, I suppose we could treat it that way if we want to say that each months payment is a gamble with a certain negative EV. The issue here isn't the positive or negative expectation, however. It's the variance, which is extremely extremely high. Would you play poker if the variance was 10 times higher, even if it was still a beatable game?

At a certain point the variance become so high that the ROR is 100% if you lose a single wager. Health insurance is a great example. Even if it's positive EV, there is a 100% ROR for any typical American for losing a single wager, so the game is not worth playing. I would say I wouldn't wager more of my income then I could lose without dramatically affecting my lifestyle.

A typical bad injury probably costs between 1k and 35k. So I would want to have an income where 35K is not a dramatic loss. Maybe a half-million a year after taxes could do it?

Note that Im looking at it backwards, IE, not having it is gambling. This might be a bad way to go about it, suffice it to say, the variance is a real bitch in high stakes low odds games.

Re: Health Insurance EV question
 

You should at least get major medical. The big problem is something major happening and wiping out your bankroll (or a large portion of it) which costs you potential money you would have made.

Re: Health Insurance EV question
 

[ QUOTE ]

[ QUOTE ]
Not having health insurance is probably one of the dumber ideas out there.

[/ QUOTE ]Are you saying Bill Gates would be dumb if he did not have health insurance? There's obviously some income level you can have where health insurance becomes dumb to have, I'm just wondering what that point that is.

[/ QUOTE ]

If you get seriously sick and need multiple procedures and hospital time and medication the costs can run in the hundreds of thousands if not more.

Do you think bill gates doesnt have insurance on his home because he is so rich he can buy a new one if it burns down?

Personally, i leave the gambling to the pokerrooms and not my life. Being cheap with your health just isnt a good idea. EV or no EV.

Re: Health Insurance EV question
 

[ QUOTE ]
I thought the same thing before, health insurrance is -EV and only necesary for those w/o a large enough BR. However, this fails to take into consideration the power that health insurrance companies have in negotiating lower rates. So their rake is mitigated.

[/ QUOTE ]are you saying health insurance companies actually get better deals, enough to offset the costs of health insurance? I find this somewhat hard to believe, can you be more specific or provide evidence somewhere? I'm not saying you're wrong I want to believe you I just want proof. [img]/images/graemlins/smile.gif[/img] Would this fall under getting better deals on regular medicine, or would this fall under getting better deals if I needed to undergo multiple serious operations?

[ QUOTE ]
You should at least get major medical. The big problem is something major happening and wiping out your bankroll (or a large portion of it) which costs you potential money you would have made.

[/ QUOTE ]You're making assumptions on how much I make. That question wasn't "should every poker player just skip health insurance?", but rather "At what income level is health insurance not a good idea to have?"

[ QUOTE ]
If you get seriously sick and need multiple procedures and hospital time and medication the costs can run in the hundreds of thousands if not more.

Do you think bill gates doesnt have insurance on his home because he is so rich he can buy a new one if it burns down?

Personally, i leave the gambling to the pokerrooms and not my life. Being cheap with your health just isnt a good idea. EV or no EV.

[/ QUOTE ]WOW 200k+? How common is this? If I were Bill Gates I would not have home insurance (except that I think it's required by law). I'm not necessarily gambling with my life, I don't see where you get that from.


[ QUOTE ]
At a certain point the variance become so high that the ROR is 100% if you lose a single wager. Health insurance is a great example. Even if it's positive EV, there is a 100% ROR for any typical American for losing a single wager, so the game is not worth playing. I would say I wouldn't wager more of my income then I could lose without dramatically affecting my lifestyle.

A typical bad injury probably costs between 1k and 35k. So I would want to have an income where 35K is not a dramatic loss. Maybe a half-million a year after taxes could do it?

Note that Im looking at it backwards, IE, not having it is gambling. This might be a bad way to go about it, suffice it to say, the variance is a real bitch in high stakes low odds games.

[/ QUOTE ]What are the odds that you'd have to spend more than 35k in a year? More than 100k? More than 300k? I just have no clue what anything costs or how frequently people undergo operations. Also not having health insurance isn't gambling with an infinite bankroll (Bill Gates), and certainly it's not gambling with smaller bankrolls too. It sounds like you're saying that after 500k it's not really gambling anymore.

Re: Health Insurance EV question
 

Anything done at the hospital is hella expensive.

I passed a kidney stone not to long ago and it ran me 12K. They didn't do crap.

Health insurance is so ridiculously necessary. I can't believe you would even think about not getting it if you make enough money to pay for it.

Re: Health Insurance EV question
 

[ QUOTE ]
I thought the same thing before, health insurrance is -EV and only necesary for those w/o a large enough BR. However, this fails to take into consideration the power that health insurrance companies have in negotiating lower rates. So their rake is mitigated.

[ QUOTE ]
are you saying health insurance companies actually get better deals, enough to offset the costs of health insurance? I find this somewhat hard to believe, can you be more specific or provide evidence somewhere? I'm not saying you're wrong I want to believe you I just want proof. Would this fall under getting better deals on regular medicine, or would this fall under getting better deals if I needed to undergo multiple serious operations?



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A few years ago, my wife was hospitalized for 40 days, 10 of which was intensive care. The Hospital bill alone (not including doctors, specialists, x-rays, catscans, procedures, etc.) (ie; just room and board and nursing care) was $225,000. I owed the hospital $500 or some such amount from our deductible and I asked how much the Insurance company was paying of the rest and the hospital told me that their agreement with the insurance company had them paying something around $24K.

Re: Health Insurance EV question
 

Honestly. I think you may be looking at this the wrong way.

To me, Health insurance is a luxury I hope that I can afford. Not a discretionary item I hope I don't have to pay for.

There are millions of people in the US who wish they had it.

Re: Health Insurance EV question
 

[ QUOTE ]
[ QUOTE ]
I thought the same thing before, health insurrance is -EV and only necesary for those w/o a large enough BR. However, this fails to take into consideration the power that health insurrance companies have in negotiating lower rates. So their rake is mitigated.

[/ QUOTE ]are you saying health insurance companies actually get better deals, enough to offset the costs of health insurance? I find this somewhat hard to believe, can you be more specific or provide evidence somewhere? I'm not saying you're wrong I want to believe you I just want proof. [img]/images/graemlins/smile.gif[/img] Would this fall under getting better deals on regular medicine, or would this fall under getting better deals if I needed to undergo multiple serious operations?


[/ QUOTE ]
Insurance pays far less than you would pay if you paid out of pocket without insurance. My mother and Step father are both doctors and I helped them out with billing for a while and it is unreal.
In most surgeries, there are actually multiple procedures that are all billable separately. If you had surgery w/o insurance, you would pay full price for all of them. Medicare (just as an example) pays their rate (which is always less than what the doc charges) for the first billed proceedure, they pay 50% OF THEIR OWN RATE ON THE SECOND AND 25% ON EVERY ADDITIONAL PROCEEDURE.
Insurance companies have negotiated rates for everything a doctor does, from a physical to major surgery. Having health insurance entitles you to the rate they have negotiated. In the Bill Gates example, it would still make sense for him to have insurance with a million dollar deductable, just so he could get the negotiated rates.

Re: Health Insurance EV question
 

The issue is not how much medical expenses would cost you in a given year. 90 percent of the time it won't be too bad. And you may pay out more than you recieve. but how do you know that you won't wake up with a tumor, cancer or fall and break your neck? these things happen every day to people (young and old), and if you dont have health insurance you could be looking at hundreds of thousands of medical debt.

And if you have insurance you can get the best treatment and services, while without insurance you will look for the cheap way out. Personally, i dont want to be cheap with my health.

Again, not having health insurance is utter stupidity (provided you can afford it).

Re: Health Insurance EV question
 

You can probably afford to break your arm for a couple thousand (as long as it is not the one you use with your mouse). Its the: shatter a few bones while skiing, needing pins to hold you together and lots of physical therapy; or contract some rare illness that ends up having you hospitalized for more than a week that will simply break you.

As someone mentioned you at least need major medical.

Besides why should all the rest of us have to pay extra when some cheap ass poker player decides he should have a good time with that $300 per month rather than pay for insurance.

Re: Health Insurance EV question
 

If you're young, single, healthy, and never go to a doctor, buy major medical with a very big deductible and play the odds on the small stuff. One night in a hospital can easily be 30K. The big stuff can bankrupt you. These days it may well bankrupt you even if you do have health insurance.

None of it really matters anyway. Within five years there will be no more employer-paid health insurance, and within ten years the health care industry will have bankrupted the entire country with their obscene prices.

Re: Health Insurance EV question
 

[ QUOTE ]
[ QUOTE ]
I thought the same thing before, health insurrance is -EV and only necesary for those w/o a large enough BR. However, this fails to take into consideration the power that health insurrance companies have in negotiating lower rates. So their rake is mitigated.

[/ QUOTE ]are you saying health insurance companies actually get better deals, enough to offset the costs of health insurance? I find this somewhat hard to believe, can you be more specific or provide evidence somewhere? I'm not saying you're wrong I want to believe you I just want proof.

[/ QUOTE ]

The example I gave yesterday was I got a series of routine (but thorough) bloodwork done this summer. The hospital charged over $700, but the insurance company only paid $200 or $300, and the hospital got stiffed on the difference. If I didn't have insurance, I would have had to pay that $700 myself.

The insurance companies get better rates because they are big enough to negotiate it. This is why many doctors I know won't accept Medicare patients without a referral, because Medicare will stiff them.

You're not buying the insurance, you're buying the discount. I don't think it should be called "insurance" in the first place, as the insurance aspect is only part of the benefit.

Re: Health Insurance EV question
 

My wife and I self-insure a lot of risks, either by not carrying insurance at all (dental, vision), or by carrying a very high deductible (auto, homeowners).

We both have employer-provided medical, and despite a significant net worth, we would not self-insure this risk. As others have mentioned, at least get coverage to take care of the big injuries.

1. Catastrophic/long-term medical care is outrageously expensive.

2. If you can pay regular doctor visits/lab work/meds out of pocket, fine (although even that stuff can add up)

3. If you are seriously injured, you will likely also lose your earning power due to being incapacitated... so medical injury is a "double whammy"

All Insurance Is - EV ...
 

...under usual circumstances. If you can somehow 'past-post' then you might find a +EV situation.

Re: Health Insurance EV question
 

"However, this fails to take into consideration the power that health insurrance companies have in negotiating lower rates. So their rake is mitigated. "

I've had success getting providers to bill me at PP rates in some situations. Also, there are dozens of expensive proceedures that are common for the insured that are almost worthless health-wise that as a self-pay I decline. Overall I'm 15 years worth of premiums ahead by self-insuring. That includes surgery this year.

Re: Health Insurance EV question
 

Get married to a woman with a steady job and health insurance.

Re: Health Insurance EV question
 

I figured I'd post this as a cautionary tale.

I had always been very healthy. In shape, exercised, ate well, etc. Right after I graduated from college at age 21, I had several part-time jobs, but none with benefits, so I got health insurance on my own. That fall I got ridiculously sick for no apparent reason and almost died. Without boring anyone with details, I ended up spending a month in the hospital three times over the next year and a half after some surgery complications. The doctors never really figured out where the problems came from, only that the random abdominal infection was bacterial.

The bottom line is that the total expenses were over half a million dollars. Without insurance, I shudder to think what would have happened. With it, I still had to fork over a some of my savings, but since I was a compulsive saver, that didn't affect my future much.

So I laugh/cringe whenever someone says they don't need health insurance. You just never know. The $1000-1500 I spent that year ended up saving my future, both literally and financially. Plus when you've almost died, the bad beats don't hurt quite as bad.

Re: Health Insurance EV question
 

[ QUOTE ]
Do you think bill gates doesnt have insurance on his home because he is so rich he can buy a new one if it burns down?

[/ QUOTE ]

Depends on the value of the home. If he has a $400K hunting cabin up in the woods of Washington, I'd say no, he doesn't have insurance for it. Why would he? The varience there makes no difference to him at all. It would be like me insuring my kid's tricycle.

Of course, I'm sure he'd have some kind of umbrella policy against liability for the place, but that's not what we are talking about here.
--
Scott

Re: Health Insurance EV question
 

I ain't reading all the posts here...sorry if this is duplicated...

What you can buy now is stuff called "High Deductible" health insurance. If you get the right plan, you would pay out of pocket your first $2000 of claims or so, per year, and then get everything covered after that. From an dollar EV standpoint, this will be your lowest premiums and still provide a lot of protection if something horrible happens.

Check with your insurer and make sure that they can rate you by your age. If not (age-specific rating did not used to be legal for BCBS in Michigan, just legal for EVERYONE ELSE), then there will be no way in hell you are paying proper rates for someone your age. This will most likely not apply where you live, but just thought I'd throw that out there.

You might even want to consider that someone may ask you to pee for them, I don't know much about individual insurance. Although I realize that that applies more to Life Insurance, health insurers are getting more and bigger pickles up their butts these days.

Re: Health Insurance EV question
 

[ QUOTE ]
You should at least get major medical. The big problem is something major happening and wiping out your bankroll (or a large portion of it) which costs you potential money you would have made.

[/ QUOTE ]

this post is exactly right and the reason that I, a healthy 26 year old, carry major medical for under $100 a month. The possibility of a large negative event is too big for me to ignore

Re: Health Insurance EV question
 

the part about the companies negotiating for a better price is relevant.

I had also read (somewhere on these forums awhile back...so take that fwiw) that health-insurance is +EV because you can actually get better value for your money because the companies are investing it/earning interest on it.
So the value you are getting is partly from the combined interest of all the money the company has (meaning a higher percentage than if you just invested that money on your own).

Probably not enough to make up for the profit-margin that the companies have I would guess...but this seemed to be the argument that was being made.



I really don't know how it really works....but I can see how it would be possible:


Company makes 10% interest on all the money (including yours).
Company pays out 95% of all the money they have for their customers various surgeries/medications.

If they're paying out only 5% less...but it's AFTER they make 10% interest on it....then the power of all the combined money making more interest actually gives you an overlay on your health-insurance premiums.



I have absolutely no idea whether this is how it works or not....but I find it plausible enough.

Re: Health Insurance EV question
 

Under 35 I would say there is no need for insurance.

Older than 35 it is necessary.

Reason being most people under 35 do not have the assets to justify having insurance. Also most people under 35 will not have any major illnesses except an injury from an auto accident. Accident related injuries are usually covered by your auto insurance.

Re: Health Insurance EV question
 

[ QUOTE ]
Under 35 I would say there is no need for insurance.

Older than 35 it is necessary.

Reason being most people under 35 do not have the assets to justify having insurance. Also most people under 35 will not have any major illnesses except an injury from an auto accident. Accident related injuries are usually covered by your auto insurance.

[/ QUOTE ]

My friend just got his appendix out... cost over 20k... good thing he had insurance. Unexpected things happen, even to young people.

I agree that all insurance is -EV (not only are you paying for your expenses, but for everyone else who commits fraud, and all the adminsitrative costs plus the companies profit), but unless you are a multi-millionare, the risk of needing insurance is just too big. If your young and healthy, get insurance with a high deductible, mine was around $80 a month.

EDIT: Just read through the some other posts in this thread, and it could be +EV just from the better prices the insurance companies are able to negotiate. They would try to charge you a lot more otherwise.

Re: Health Insurance EV question
 

[ QUOTE ]
Reason being most people under 35 do not have the assets to justify having insurance

[/ QUOTE ]
What you are saying is take the risk, if something bad happens go bankrupt, get medicaid to cover the worst of it, and hope to God that you do not need some really expensive procedures/prescriptions/etc that are not covered through the welfare system.

Great Advice [img]/images/graemlins/mad.gif[/img] Anybody that doesn't really want to get anywhere in life should take you right up on that one.

I would also like to point out that the people that you are pitching this to, would also be the ones that would likely have the absolute minimum for auto insurance and if you have ever been in a serious accident you would see that 10K would take you about as far as you could spit.

Re: Health Insurance EV question
 

[ QUOTE ]
most people under 35 will not have any major illnesses except an injury from an auto accident.

[/ QUOTE ]
I know perfectly well one example of the opposite does not disprove what "most" people experience. But honestly, without statistics to build a foundation for your claim it seems plainly ludecrous.

My experience: 34 years old I caught a bad urinary infection, pretty much out of the blue. It turned out to be resistant to the 'normal' anti-biotica I was treated with, and progressed to one of my, erh ... private parts. It's my luck nature supplied me with to of these, for after 2 weeks in the hospital the sad remains of the affected body part had to be removed (no need to lanquish in the level of pain associated with this) to contain the infection.

All in all this unfortunate event ended up costing me 3 weeks in the hospital. Never got an explanation why it happened to me. I was happy not to have to cover anything but my loss of income during those 3 weeks.

Best,

McMelchior (Johan)

Re: Health Insurance EV question
 

[ QUOTE ]
Personally, i leave the gambling to the pokerrooms and not my life. Being cheap with your health just isnt a good idea. EV or no EV.




[/ QUOTE ]

What is this ?
ZeeBoo asked legimitimate interesting question and now ppl are telling him not to gamble with his life. C'mon.
Insurances are -EV, for houses , for health and for lives or for anything else. For each insurance there exists bankroll level on which taking this insurance is not wise (to say the least). Now our task is to estimate this level.
Unfortunately I wont give it a shot cause I have no idea what medical costs can be. I would guess 1.5 of a big one would be good enough. Cause even losing unlikely 200k then wont be a disaster.

best wishes

Re: Health Insurance EV question
 

What's the number one reason people file for chapter 7 bankruptcy?

medical bills

GET INSURANCE.

Re: Health Insurance EV question
 

[ QUOTE ]
What you are saying is take the risk, if something bad happens go bankrupt, get medicaid to cover the worst of it, and hope to God that you do not need some really expensive procedures/prescriptions/etc that are not covered through the welfare system.


[/ QUOTE ]

Most people under 35 are bankrupt.

Re: Health Insurance EV question
 

okay... say life insurance. if I wanted a 10k package, it would cost me 13 dollars per month... you should break that down into ev right? especially since it's a smaller amount and the event is less likely to happen (compared to a hospital visit.

Re: Health Insurance EV question
 

So you guys have to pay taxes from poker winnings and government doesn´t even pay your hospital bills?

Sad [img]/images/graemlins/frown.gif[/img]

Re: Health Insurance EV question
 

Hey Zeebo, suppose you are running a single zero roulette wheel (+EV for you) and a rich guy wants to make one and only one bet on lucky number 7.

If you don't know, this pays 35-1, but the odds for him to hit are 36-1. How large a bet do you accept?

This is an attempt to quantify how much risk you can handle

Re: Health Insurance EV question
 

Just a couple of random thoughts that will prove you NEED health insurance.

"40k" will cover most events"
In April 6 months after turning "pro" I was hospitalized for 5 days....... 5 day total $26,000, no surgery required. Just some blood tests, some meds, and a bed. (I had never been in a hospital before)

While my bills came out to $26,000 the insurance company paid around $8,000 due to their leverage and deal made with "in network hospital".

One of the monthly meds I am on is $220, my copay is $35. Another med is $24, my copay is $1.40.

You never know when something is going to go wrong, you dont get insurance because you expect something to go wrong, you get it in case. If its too expensive, consider cancelling fire and theft on your car before you cancel health.


Or in terms that some here may better understand:

<u>Insurance </u>
Blackjack= -EV
Poker (running it 3 times)= neutral EV
Health = +EV

Re: Health Insurance EV question
 

Health insurance is only +EV for people who have something to lose. When you've got nothing, you've got nothing to lose.

If you're poor in the US and become sick or injured, you go to an emergency room and they are forced to treat you whether you have any money or not. You run up $5000 or $50,000 in medical bills, then you declare bankruptcy later on. This ruins your credit, but if you were poor, you didn't care about your credit anyway.

And it's not as if it's really a choice, if you're poor enough you couldn't afford medical insurance anyway.

Re: Health Insurance EV question
 

That's right ode, our government doesnt wipe our asses like yours does. That's why wealthy scandanavians come here for health care.

Indy