Health and Human Services Secretary Doesn't Understand What Insurance Is
...But notice that it's the catastrophe which makes insurance a good deal. You wouldn't get much value from buying "grocery insurance". At best, you'd be paying an extra administrative fee to route your routine expenses through an insurer, rather than paying them directly. At worst, you'll end up with bills skyrocketing as all sorts of perverse incentives appear. After all, if the insurer is paying all your grocery claims, why not load up on filet mignon instead of ground turkey?

But insurers try very hard never to sell insurance for less than the cost of your expected claims. If you expect to buy $10,000 worth of groceries next year, it will not charge you less than that for a "grocery policy". And if we all drive up the costs of grocery insurance by consuming more, the insurer can do one of two things: raise everyone's "insurance premiums" to cover a filet mignon budget, or create a list of "approved groceries" that it will cover, and start hassling anyone who tries to file an excessively expensive claim. ...

But Kathleen Sebelius, the Secretary of HHS, thinks that catastrophic insurance isn't really insurance at all.

At a White House briefing Tuesday, Health and Human Services Secretary Kathleen Sebelius said some of what passes for health insurance today is so skimpy it can't be compared to the comprehensive coverage available under the law. "Some of these folks have very high catastrophic plans that don't pay for anything unless you get hit by a bus," she said. "They're really mortgage protection, not health insurance."...