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PaperclipPerfector  3d ago (text post)   2054 thread views

Small-Scale Question Sunday for April 26, 2026

Do you have a dumb question that you're kind of embarrassed to ask in the main thread? Is there something you're just not sure about?

This is your opportunity to ask questions. No question too simple or too silly.

Culture war topics are accepted, and proposals for a better intro post are appreciated.

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What failure modes can you foresee if insurers start paying their patients for choosing cheaper healthcare services?

Right now, patients want the best service their insurance plan covers, which causes hospitals to come up with more and more expensive services that are only marginally better. Insurance companies have no real incentive to drive prices down either, as they are legally obligated to spend their money anyway, and the more people pay them, the larger is the absolute share they are allowed to keep.

But what if the insurer could offer you two hospitals, both covered by your plan, and by opting for the cheaper one, you would get the bulk of the difference in cash, with the insurer pocketing the remainder as rightfully owned profit not subject to the 15% rule? Theoretically, it would cause hospital networks to manage costs more aggressively, as cheaper service would now be a real competitive advantage. "Do you want a $30k C-section, or a $20k C-section and $9k in cash?"

This is what copays and deductibles are supposed to handle. The insurance shouldn't be paying you for cheaper stuff, you should be paying more for the more expensive stuff. If you pay 10% of everything then it's "Do you want a $30k C-section (and pay $3k out of pocket) or a $20k C-section (and pay $2k out of pocket)?"

My understanding is that these are largely messed up and don't entirely function this way. But the idea of the insurance company paying you is just a really mangled version of this plus theft from your employer who is paying the insurance company.

But your copay example is the realtor incentivization problem, just in reverse! If copay is proportional to the total price, people won't be sensitive enough to small changes in their copay.

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