Why are health benefits not like insurance?

Insurance is supposed to be for unpredictable, catastrophic events. The concept is simple: many people pay a small amount for the protection against the “risk” of an event they hope will never happen to them. The cost of the protection is relatively small, so you don’t mind paying. You should never get “value” from this protection as it is intangible. You hope the event doesn’t happen and you never want to make a claim because your protection or premium will go up in price.

We all seem to understand this concept when it comes to our cars. You avoid making claims because your premium will rise and you want to have as high a deductible as you can afford. You know your car insurance won’t cover your regular car maintenance such as an oil change.


You would never insure your house when it is already burning partly because nobody would accept the “risk” even though it is already a known or predictable event. So how come this understanding has never been applied to health benefits? Why would you want to insure teeth cleaning? It is not risky and it is very predictable. If you do pay a premium for this “risk”, I can guarantee that it will be very expensive relative to the cost of the service. Why don’t you have a deductible for your health expenses and have protection or insurance for unexpected and high cost items? That is much more economical and allows you to decide how to spend more of your health dollars. That is what health spending accounts do best!