the insurance side of health insurance

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Freddie

Freddie deBoer used to blog at lhote.blogspot.com, and may again someday. Now he blogs here.

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16 Responses

  1. Avatar Moff says:

    It would be constructive if some of those opposed to reform were more upfront about how incredibly poorly behaved many insurance companies and HMOs in this country have been.

    Ah, but then you just pick a different insurance company or HMO and give your business to them, and then the ones that are poorly behaved go out of business, because Free Market and Competition. It’s a flawless system.Report

  2. Avatar M.Z. says:

    A lot of people have written that health insurance isn’t really insurance, and that we don’t think of it as insurance.

    No, they are wrong. Most people extrapolate life insurance modeling to insurance, and it creates a distortion. If we go to the flip side of life insurance and look at an annuity contract, we have the situation where the majority of annuitants anticipate receiving a large cash flow of money. It is still insurance.

    But, again, most people pay in more than they take back out; if that wasn’t the case, there would be no health insurance industry.

    I’m not sure this is the case. One would expect that if health outcomes differed significantly, there would great responsiveness as risk is shifted to the individual. In other words, we would expect systems like the NHS in Britain with its top down administration and virtually no risk transfered to the individual to be significantly more expensive than the U.S. system with much of the risk transfered to the individual. This is of course not the case.

    I point this out merely to say that as much as there are benefits to viewing health care in more conventional consumerist terms, particularly when it comes to cost reduction, there are limits to thinking about shopping for health care like you’re shopping for groceries.

    We have been viewing and attempting to solve our health care cost issues for over 20 years by primarily adopting a consumer centric response model. Be it higher deductibles, co-insurance, co-pays, or really high deductibles, macro savings have not materialized in the system. As with most really complex things, savings are most likely to be achieved on the supply side through such anti-market things as monopolization.Report

  3. Avatar insurance says:

    If we go to the flip side of life insurance and look at an annuity contract, we have the situation where the majority of annuitants anticipate receiving a large cash flow of money. I agree to thisReport

  4. Avatar Bruce Smith says:

    In a sane country the healthcare debate could be quickly resolved. Everybody gets the same insurance scheme as the Congress politicians currently get courtesy of the US tax payers. Cost for the citizens is pro-rata on ability to pay. However, containing costs is another matter. The possibility exists theoretically to link part of a politician’s pay to performance. The fat cats on Wall Street seem to like that so why not our representatives. So, for example, if the budget and foreign trade is balanced then full pay; if they are in deficit then less pay. Provisos would have to be made for Keynesian stimulation and war expenditure situations. Although inconceivable that politicians would actually want to give up political posturing and impose such a burden of work upon themselves to contain costs including a National Healthcare Insurance Scheme such a fantasy does allow you to see the hypocrisy and false arguments existing around the healthcare debate.Report

  5. Avatar Sycophant of the Bourgeois says:

    I see this argument a lot. And I wonder, how is this different for other products? If I buy an I-pod and it goes kaput the next day, how am I to ever know if I-pod sellers are not screwing me over every chance they get.

    There are two major market based mechanism for consumer protection.

    1) Market regulators, yes, that’s right, market based regulators. Underwriters Laboratory is one. Walmart/etc will rarely even sell an electronic good unless it has been tested and approved by this private regulatory entity. This is the elephant in the room liberals like to ignore, and I will admit libertarians often forget. Not ALL regulations and regulatory agencies are bad… but most imposed by the government have significant failures. The fact that there isn’t one single powerful health care regulator yet doesn’t mean it’s not likely for many to develop. Government regulators have largely usurped this role with very limited success and in many cases impeded more efficient and accurate private entities from developing.

    2) Warranty/Guarantee. This is one thing I’ve seen a couple insurance plans offer. Combined Health/Life insurance. Good luck denying me care assholes, my family gets 10 million bucks now.

    It’s not perfect, but how close does it really have to be until people are satisfied? If there are significant “market failures” it is highly likely individuals will find ways to solve them or limit them. That’s the point, profit and loss, success and failure, will ultimately give a superior product and coverage than any government system.Report

  6. Avatar EngineerScotty says:

    I could see the result of a combined health/life policy now.

    Dear (name of insured):

    Recently, your primary care physician informed of a diagnosis of (expensive disease, fatal if untreated). Given that the anticipated costs of treatment for this condition exceed the death benefit on your policy with us (the “Policy”), we have exercised our option under the Policy instead to pay the death benefit instead to your Estate upon your death, and terminate all other obligations under this Policy.

    Sincerely,

    (name of adjuster redacted).Report

    • Avatar Jaybird in reply to EngineerScotty says:

      So I could use that money to pay off my mortgage and see my wife get the deed to the house? Or I could use that money to go on the vacation of a lifetime and spend my last month with my wife? Or I could buy a bong the size of a VW bug and spend my last months in a haze? Or I could take the money and shop around with various doctors for cash-on-the-barrelhead treatments?Report

    • Avatar Sycophant of the Bourgeois in reply to EngineerScotty says:

      If you don’t like it then open your own insurance company and advertise how other companies are letting people die because the cost of their treatment would far exceed the value left in their life insurance policy.

      This isn’t a catch all solution. The point is this and many more are methods to solve these unsavory aspects of market provided systems. If Liberals reallocated the time they spend on advocating for government run solution rather than market based products they would be far more wealthy and far less consistently irrational.Report

      • Avatar greginak in reply to Sycophant of the Bourgeois says:

        Brilliant idea- a mom and pop insurance company. Gee now I just get myself a at least ten’s if not hundreds of millions of dollars in cash. If it was so easy to just start up an insurance company why havn’t all sorts of them sprung up to care for people with pre-existing conditions. ( oh yeah people with medical problems are money losers). Gee I believe I have heard plenty about how insurance companies let people die…….hmmmm…that doesn’t seem to have changed the market.Report

        • Avatar Sycophant of the Bourgeois in reply to greginak says:

          Once again, “why hasn’t the market been perfect” is nowhere near an argument for abandoning the market. I don’t know what systems would develop in a market free of government control. Perhaps mom and pops could survive without state mandates and other requirements on care. Our experience tells us that perceived problems generally result in market based solutions. Our experience also tells us the exact opposite with government systems. Hard choice become a whole lot more arbitrary in a system run by bureaucrats and their friends.Report

          • Avatar Travis in reply to Sycophant of the Bourgeois says:

            Except that our experience with health care tells us that our “market-based solution” is an anomaly among essentially every other industrialized nation, which features, to a greater or lesser degree, a government-provided health care system.

            We spend far more, cover far less and get no better outcomes than those other systems. That would tend to suggest that we’re on the wrong track.

            BTW, the system today *is* run by bureaucrats and their friends – they’re just privately-employed bureaucrats whose bonuses are based on how many claims they deny.Report

            • Avatar Sycophant of the Bourgeois in reply to Travis says:

              Americans also spend more on food, cars, tvs, and just about everything you can think of. I don’t think it’s particularly revealing that one of the wealthiest nations spends a lot of money on health care. Your assertion that we get less value is suspicious to anyone who has followed this debate. I wish we had a country with comparable levels of obesity and better health to measure our system against. Argentina is the closest and they are 40 places worse on world health care ratings.

              Examining cancer survival rates bodes fairly well for the US system. Either way, the current system is more than 50% government at the outset and any claims of “free market failures” come up dangerously inadequate.

              You have every right to choose another bureaucrat to run your health care. Governments and government like entities are not inherently unjust (a distinction I think very few libertarians realize), only those who assume and use power involuntarily.Report

  7. Avatar Martinw says:

    Isn’t the whole idea of insurance kind of socialistic? It was borne from a desire of the many to protect the few unfortunates, rather than every man for himself. Though, originally, I think that “benevolent societies” were not profit-based.Report

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