An insurance business only works if the losses are, by and large, randomly distributed and unexpected.
The more predictable the losses, the more an insurance offering resembles a payment plan where you are simply setting aside money with a third party to save for the eventual loss. This is because as losses become more probable, the insurance company has to increase premiums eventually to the point where the sum of the premiums is equal to the losses if the probability of loss is 100%.
This is the current state of health insurance in the US. It is not what would normally be called an insurance product. In fact, quite a few of the stipulations of ACA make health insurance premiums explicitly a tax from the young/healthy to the old/sick. Therefore, the industry term is to refer to health insurance companies as "managed care organizations" (MCOs), some of whom sell health "insurance".
In the US, when you pay health insurance premiums, if you are young/healthy, you are mostly paying for the treatment of the old/sick, and only minority paying to protect against the risk of you breaking your arm.
The profit that MCOs earn is actually more like an administration fee. The US could have implement an NHS style taxpayer funded healthcare system, but the politically viable option in 2010 was to outsource the administration of healthcare (pricing negotiations, healthcare rationing, auditing, etc) duties to MCOs, hence we have a system where the government (or employer) sets the rules, that abide by ACA rules, and then the MCOs execute them.
For example, nearly half of Americans' healthcare is paid by the government, but it is administered by MCOs. The MCOs are not setting the rules, just carrying out the stipulations of their contracts with the government:
https://crsreports.congress.gov/product/pdf/IF/IF10830
Finally, to answer this question:
>What is the point of paying for insurance, then?
If you have future earning potential, or a little bit of wealth saved up, then health insurance in the US is valuable because your out of pocket maximum is capped.
https://www.healthcare.gov/glossary/out-of-pocket-maximum-li...
This is one of the policies that also helps make health insurance premiums more akin to a tax, along with, but not limited to, the following policies:
Age Rating Factors (adds cost to young people's premiums and lowers old people's premiums)
https://www.cms.gov/CCIIO/Programs-and-Initiatives/Health-In...
And insurance cannot be denied to someone for any reason, and has to only be based on age/location/tobacco use:
We have our current system largely as a result of regulatory capture, so no amount of pointing to the status quo and shrugging at its complexity legitimizes it. Again, I fail to see the legitimacy of a regime in which I must either pay a for-profit corporation for the privilege of preventing my doctor from doing what is in my own best interest or be wealthy enough to pay everything out of pocket.
The "legitimacy" lies in the fact that that is what was politically possible to accomplish. I put legitimacy in quotes because I assume you mean legitimate in the context of some type of moral or ideological sense, which I do not find terribly interesting in this case, where there are many real world constraints at play.
At the very root of it all is the fact that demand for healthcare greatly dwarfs supply of healthcare, starting from the simple fact that changing bedpans is a highly undesirable task and going all the way to the fact that medicinal knowledge is very difficult and costly to acquire. And so politics will be involved in how healthcare is distributed.
You can even go back to your statement of
>from doing what is in my own best interest
99% of people have no idea how to evaluate what is in their own best interest when it comes to medicine. Even doctors outside of their specialty probably do not know, and the tiny minority that do would acknowledge that at some point they are also guessing at the machinations of something complex like the body.
The for profit (and not for profit) labeling is mostly a distraction. Doctors do not treat people without a profit, programmers do not program without a profit, and a managed care organization does not sell its services without a profit.
These 2 big constraints shape how much and what kind of healthcare system we can afford:
-low supply of healthcare relative to demand - requiring a system of allocation of resources
-medicine being extremely difficult and possibility of doctor making mistake or being corrupted requiring second opinion - i.e. doctors and pharmacists employed by managed care organizations
Obviously, everyone would love if everyone could get all the healthcare they could ever want at anytime they want. But our parameters do not allow for that. Back to the original question of why a for profit managed care organization needs to be involved at all? It does not, except politically, that was the solution the leaders agreed upon. I suspect politicians also like MCOs in the middle because it keeps the heat on the MCOs and deflects from them.
We could have gone the NHS way with taxpayer funded healthcare, and the NHS handling all the administrative functions that managed care organizations do. But there was significant political opposition to that, probably because a lot of politically influential classes stood to lose in that proposition. So we have what we have.
Note that to counteract excessive profit incentives, the ACA implemented minimum medical loss ratios and a healthcare exchange so that companies could compete for customers and hence have an incentive to keep premiums lower (presuming the existence of sufficient competing MCOs). Why not just cut all that out and let government deal with it? Because that is what was possible.
https://www.healthcare.gov/health-care-law-protections/rate-...
Regulatory capture[0] narrowed the possible to only solutions involving for-profit health insurance corporations. If you don't find a form of corruption to be of interest here, I'd be especially interested to know why.
Hence a compromise had to be reached. Getting taxpayer funded healthcare administered by the federal government simply was not an option, and I have not seen evidence that it was because the health insurance business was lobbying every Republican.
What I find more likely is that the more complex you make a system, the more you can engage in price discrimination via price obfuscation. A straight taxpayer funded healthcare option would have immediately impacted the bottom line, since government expenditures visibly go up, and would not allow a way to discriminate to those who receive the healthcare.
The compromise, however, allows for all sorts of games to be played. Such as allocating more and better healthcare to older people in comparison to poorer people. This is accomplished simply by having different reimbursement polices in Medicare (old people, strong voting power) and Medicaid (poor people, weak voting power). Medicaid is also further broken down into being administer 50 different ways by 50 different states.
Then you have employer self insured plans doing things the way they like, and employer subsidize plans doing things the way they like, and church plans that do not even provide healthcare. Basically, a way to expand healthcare in a way that still disproportionally allocates healthcare to richer and/or more politically influential people, but helping the others a little bit.
At least we got the metal levels and healthcare.gov out of ACA so there is some ability to compare insurance products.
And at the end of the day, even if you took away the cut that MCOs take for administering all this healthcare, it would mostly save around 5% to 10% (the profit margin plus savings from redundancies). MCOs currently pay out 75% to 80% of all premiums, and profit 5% or less, which leaves 15% to 20%, but the government would have to duplicate many of the functions of the MCO.
https://www.kff.org/private-insurance/issue-brief/data-note-...
Even in a taxpayer funded scenario, I would bet the doctor is going to have to get approval from the system to provide a treatment above a certain cost.
That happens due to scarce resources. Most often in developing countries. Where I live, there are places doctors work at that barely have water for them to wash their hands. Ordering an MRI is a big deal.
I refuse to believe this would ever be a problem for the US.
We have a special visa for doctors willing to live in undesirable areas of the US for many years. There is even a website for it:
https://data.hrsa.gov/tools/shortage-area
https://www.hhs.gov/guidance/document/hpsa-and-muap-shortage...
And now to meet demand for doctors without having to pay for more doctors, most states have allowed a Nurse Practitioner or Physician Assistant to basically practice as a doctor where a doctor just oversees their clerical work. So if you have lesser insurance coverage or live in an area with insufficient doctors, then you may see an NP or PA who is far less qualified than a doctor.
Why not make it official then? Why not end this "insurance" thing and start funding hospitals with taxpayer money? The US is absolutely rich enough to do it.
> Because that is what the patient can afford.
What is the point of paying for insurance, then? Nothing legitimizes for-profit insurance companies having any role or prerogative in health care, other than the status quo.