Preventing a chronic disease like type 2 diabetes saves hundreds of thousands of dollars per patient. However, due to high customer churn and standard one-year contracts, insurance companies see no long-term financial upside in prevention, as another company will likely benefit from their investment.

Rising premiums and deductibles are pushing people away from traditional insurance. This isn't an abandonment of healthcare, but a market response to a product that no longer provides adequate value, forcing a shift towards cash-pay and alternative models.

As the US population ages, more people enroll in Medicare, which typically under-reimburses hospitals for the full cost of care. To compensate for this revenue shortfall, hospitals raise the prices for patients with private, employer-sponsored insurance, effectively shifting costs from the public plan to commercial payers.

The rise of cash-pay proactive health creates a two-tier system. One group can afford to defect from insurance and build their own health stack, while another cycles through the traditional system, relying on charity care, exacerbating inequity.

A structural challenge in managing senior employees in the U.S. is the sharp, non-performance-related increase in their cost due to age-based healthcare premiums. An employee can cost thousands more per month after turning 50, creating pressure to justify their value on a purely financial basis.

Contrary to belief, Medicare isn't automatic. The government imposes lifetime penalties on those who delay signing up to prevent people from waiting until they are older and sicker. This forces younger, healthier 65-year-olds to pay into the system, ensuring the risk pool remains balanced and financially viable.

A rule requiring insurers to spend 85% of premiums on care caps their profit margin at 15%. This creates a perverse incentive: the only way for an insurer to increase its absolute profit is to increase total healthcare spending, discouraging preventative care and cost-saving measures.

The core driver of high insurance costs is the unregulated and widely variable prices charged for identical products and services. Different insurers pay vastly different amounts for the same thing, a market failure hidden from consumers by fixed co-pays, which ultimately leads to ever-increasing premiums for employers.

For individuals with a multi-million dollar net worth, forgoing expensive health insurance can be a rational financial choice. The substantial savings on premiums (e.g., $300-400k over a decade) can create a fund large enough to cover most medical costs out-of-pocket, effectively creating a self-insurance pool.