

The Lesson of Anthem Blue Cross  - terra_t
http://www.nytimes.com/2010/02/19/opinion/19fri1.html?ref=opinion

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cschneid
I'm crossposting my comment from a very similar Reddit thread (although that
thread was more about "omg, insurance companies are teh evilz"). Hopefully I
get some more meaningful discussion about it here.

\------------

Insurance companies are not money piñatas. They are insurance. The premise is
that you have a low probability of having a massive expense. You pool your
money with others (via the insurance company) to cover it if it happens to be
you who gets unlucky.

The insurance model falls apart when somebody is already sick. Then it's no
longer a low probability of having the expense, it's almost guaranteed. So now
insurance is the wrong financial model. Charity, or a publicly funded option
is, since it becomes a moral issue (we don't let people die of stuff we can
fix), rather than a financial (I pay in a bit, possibly need large payout).

That's not to say they aren't evil, and want their profits, and go out of
their way to be dicks about it, but all the hubbub about existing conditions
just shows that insurance is the wrong model for health care coverage.

I fully support a public option, which is effectively an insurance company
that also has the moral backing of paying for blatantly unprofitable cases. It
won't be perfect, and might suck in many cases, but it sure would be much
better than any insurance based health care system could be.

~~~
akeefer
Exactly: the incentives are wrong for everyone under an insurance model.
Healthier people have an incentive to leave the risk pool and/or only keep
catastrophic coverage, increasing premiums for everyone less fortunate.
Insurance companies have no incentive to insure anyone who seems like a high
risk, i.e. due to a pre-existing or likely-to-emerge condition. Consumers have
no incentive to manage their own care expenses or make decisions for
themselves, because if they have insurance they're not really paying the full
costs. Insurance companies have incentives to deny care whenever possible.
Hospitals and doctors have an incentive to charge uninsured people more than
insurance companies so that the insurance companies can provide a value-add
and because they have to make up for all the care provided to un-/underinsured
people who can't pay their bills.

If you believe that a wealthy society like ours has a moral imperative to take
care of its poor and sick and elderly, then the insurance model is hopelessly
broken. It doesn't mean there's some perfect model out there that has
perfectly aligned incentives and no moral hazard, just that this one is
probably one of the worse ways to organize things.

If you don't believe that there's any such moral imperative, then that's an
entirely different debate.

------
fnid2
_The less healthy are staying with Anthem, where their higher medical costs
are driving up premiums._

The new healthcare bill is great, except of course if you are young, healthy,
and don't need insurance at all, in which case, your premiums will go up and
you will be _forced_ to buy insurance or face fines.

And, because the health care laws in congress will require a maximum premium
variability of 2-3x, meaning the most expensive insurance plans (for older
unhealthy people) can only be 2-3 times the cost of the cheapest ones (for
young, healthy people) then what I predict the insurance companies will do is
dramatically increase premiums for the young to keep the upper end of premimum
costs, which are currently 10x or more than the cheapest, right where they are
and raise the lower levels to come in line with 1/3 of the most expensive.

Essentially, this health care bill legally requires young healthy people to
buy insurance at high rates to pay the medical bills for the older people.

It's a TAX on the YOUNG to care for the OLD.

~~~
coolnewtoy
it's impossible to buy non-group health insurance for a planned pregnancy. and
there's enough scary stuff that COULD happen that you wouldn't want to be
pregnant without. Old people have medicare. It's young people who have any
medical needs at all who are screwed by the current system.

~~~
cschneid
Please refer to my post below that starts out with "Insurance companies are
not money piñatas". Explain why a planned pregnancy is a candidate for an
insurance payout?

(not that I don't think pregnancy should be covered, just not by an insurance
company, but by a morally based public plan without the profit motive, or
insurance model).

~~~
coolnewtoy
actually I think a profit-based insurance model is the problem. you cannot
take care of shareholders and patients at the same time.

but since you have a profit-based model, excluding planned (or unplanned for
that matter) pregnancies from coverage is the same problem as excluding pre-
existing conditions. insurance companies cherry-pick the risk pool to increase
profits - they only want to give insurance to people unlikely to need it.

for private insurance to provide any social value, you need a large risk pool
that includes healthy and high-risk patients, and the insurance companies must
be required to actually cover people who need medical care.

the healthy can't be allowed to opt out, and the insurance companies can't be
allowed to decline coverage to anyone in the group.

~~~
cschneid
your last line is basically a public plan like I suggest, except run by the
private sector, with direct payments instead of taxes. We basically agree on
the shape of the solution, if not the specific implementation.

But expecting insurance companies as they currently exist to pay for pre-
existing without that kind of tradeoff is like crashing your car into a pole,
then walking down to state farm and being like "ohh, I need car insurance,
full coverage, and pay for my repairs. I don't expect my rates to be different
because of that though".

And really, a planned pregnancy is mostly a pre-existing condition. I wonder
why there aren't any supplemental policies for complications though. Something
that wouldn't cover the expected stuff, but would cover real medical
complications.

~~~
lutorm
Pregnancy might be something that's by choice, but that practically everyone
will go through. Do we really want a society where only the rich can afford to
have kids?

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CoryMathews
No way, California and money problems.. Never saw that one coming. </sarcasm>

downvote away but you know its true.

