What we have now is an ad-hoc nonsensible set of what you can and can’t risk profile on, and every time we learn some new way to risk profile then we’ll have to decide again if we want to regulate it. On top of that this just increases the risk of insurance companies getting it wrong and needing to be bailed out. I’d rather we had a conservative, boring and simple insurance industry and just get off the treadmill.
There is the other unstable equilibrium if insurance is fully fair but non compulsory - it’s participation bias. What’s the benefit of getting insurance now when I can get it right before I go to the doctor (health) or on my deathbed (life)? Obviously at that point there’s no insurance - risk dilution - it’s a subsidy.
Which makes the only way to have fair insurance is to require everyone to have it and enforce very simple underwriting criteria. It will also require most folks to pay more than they could otherwise. Unfortunately the US has historically been bad at attempting to pass a law with that kind of effect, though the ACA got closer than most attempts before the recent changes.
In practice, monthly insurance premiums are around 110-130eur per month with a minimum deductible of 385eur. GP visits don't cost anything additional and only specialist care eats into the deductible.
Now, if you are talking about requiring everyone to use the same insurance for the same price (maybe a government insurance) then I would want to ban drinking and smoking. Because now their actions directly impact my by rasing my insurance cost.
You will not receive exactly what you pay. Some people will receive much more, and their payouts are subsidized by the others who receive much less. That is the nature of insurance.
What's the difference between your question and "How would you like it if you had to pay just as much flood insurance as someone down the street whose house actually gets flooded next year?" The only difference is that you can't reliably predict things with that level of accuracy.
Insurance companies and low-risk insurance buyers are both incentivized to predict individual risk profiles as accurately as possible, but this gradually drives the system towards uselessness.
Currently I want the insurance company to know what my expected value is properly so that I can get a rate that is appropriate for my needs. Of course I would prefer that they make a mistake and assume that my expected value is lower than reality, but if they make to many mistakes like that then either they will go out of business or raise their premiums.
Call me naive, but I also always thought that's kind of the point of it: spreading the risk, or solidarity to use a less fashionable term. People can be very sick through no fault of their own, and those who are healthier should look out for them. If you calculate that "fair share" according to exactly how sick people are, then what's the point, wouldn't that just be a needless middleman that gets paid upfront?
Cautious Prius owners probably wouldn’t be happy sharing equally in a risk pool with enthusiastic drivers of sports coupes. If insurance rates were standardized, there’d be a lot more sports cars out there, until the Prius constituency got them banned altogether. Charging different insurance rates gives all parties what they want at a cost that creates appropriate incentives.
You might be able to say something similar about health insurance and sedentary smokers vs. runners. If an extra hour of work is less economically valuable than a gym visit, the incentive structure should reflect that.
I agree that insurance rates should not be affected by luck. One of the reasons the preexisting condition part of the ACA is important.
If someone gets sick and thus becomes sedentary due to their illness now you’d be effectively discriminating against them due to their preexisting illness because they can’t go be a marathon runner.
So we better create a rule that somehow excludes ill people from being discrimated against like this. Oh and then we’ll force the sick person to go through a hellish process to prove it too. Etc.
Wrt health insurance we should just get off that train. It only leads to a worse and worse place.
2. Being healthy already has quality of life consequences. And the extra cost to insure those lifestyle choices are probably pretty low, and most of that cost is just shifting it from primary insurance to medicare. Because everyone dies of something, and a lot of times it's really expensive. Insurers care a lot about whether that happens at 64 or 66. But as a society it doesn't really matter, and the insured bears most of the impact.
I'm one of those people who gain weight easily due to always wanting to eat. I was morbidly obese at 19 despite coming from a household of healthy eating. I'm now 33 and have maintained a healthy weight for years but it isn't fun. For me to maintain a constant, healthy weight I need to be hungry. Despite 5+ years of maintenance, I am still hungry constantly.
Is insurance that large a cost factor? I would imagine the increased cost of the car and fuel costs would still be strong incentives against upgrading to sports cars.
You could say there's a spectrum, between stuff like healthcare and genetic diseases, and someone insuring their pinky finger not because they need it, but because they're vain and think it's an astonishingly pretty finger, and they're just that rich. But somewhere on that spectrum, there are also families that lose bread winners, and I don't see why solidarity wouldn't also apply there.
I bust my hump in the gym a few days every week because I want to age well - I make an effort to eat healthy food and now I gotta pay for an cookie addict who would rather slurp down medication than make lifestyle changes? Screw that.
I made my choices, I can live with them. Others make their choices, they get to live with their choices. If they get to take good stuff from me to support their bad choices, I expect some reciprocation.
That cookie addict will be paying for your medicare and social security for 30 years, while you pay for their medicare and social security for 5.
Everyone dies, and healthy people live a long time, and can die very die slowly and expensively. He'll pay for your full time assisted living while you die from Alzheimer's at 95, you'll pay for some critical care after his heart attack at 65.
Why can't we just pay for our own if we have the means and give those without means basic, cost-effective care for things that can't be solved with lifestyle changes?
And why do I have to be forced into this? Why can't I just chose my relations and affiliations for myself? Besides, bold of you to assume that social security will be there for me when I'm able to retire. That money is gone, I'm not going to see a dime of it - it's just an extra 15% tax on my first 110k.
This is called the Iron Triangle of healthcare.
Furthermore, you can have public insurance that charges co-pays, high-deductibles etc. Public Healthcare does not guarantee 'free healthcare', and if it did it would do so at cost of access (rationing) or quality (cost-effective care).
You can do that today with an HMO or a High-deductible plan if you wish.
There are many issues with healthcare in the us, but this is not a solution for them.
That Iron Triangle assumes that you have an efficient system. If you have a wasteful system (say, you pay twice as much per person as other places do without any advantage in quality or access) then you can reduce costs without hurting other things.
There are some benefits in government administration, but "efficiency" is not one of them.
Taken to its conclusion we should all be in risk pools of 1.
Social media is just _super weird_ and I think as a societal experiment we're closing in on the realization that it doesn't have any value, people like to communicate but - just like in real life - people generally like to partition their lives. Social media companies gain no value in allowing a partition of activity, the only social media-ish company that seems to make an effort to actively support it is reddit and that's mostly because the focus is never on you as an individual.
There’s another side to this though, why should a low risk person be in the same risk tranche as somebody who has lots of guns in plain sight, is out drinking 3 nights a week or has high-risk hobbies?
Life insurers have pretty transparent interests. A middle aged guy with guns and heavy alcohol use is a more expensive risk for death. Right now they only use age, occupation, specific medical and smoking status.
It operates by taking events that are unpredictable individually and grouping them together such that they are predictable in aggregate. The larger the groups are, the better this works.
At the same time, there’s a competitive advantage to using smaller groups, if you can reliably discriminate. Except that once you take it too far, you approach the individual case again and insurance ceases to have a point.
A life insurance company that buckets everyone together will lose out to one that divides people up into groups based on their risk. That one in turn would lose out to a company that has an accurate death clock they can use on every customer to provide perfectly individualized coverage. And yet the death clock company won’t be able to sell any insurance at all, unless they can keep it a total secret, because people could accomplish the same thing on their own.
If you make the fundamental assumption that what happens to people has a level of randomness to it (don't think we'll ever be able to escape this assumption) then insurance always will have a point even if your bucket size is the size of the individual.
This is because insurers provide a hedge against a certain amount of negative randomness over a time peroid. They calculate the risk on a policy as if they provided it to you a million times and then base their pricing on that. Since they do this across a body of customers the pooling system still functions, it just is more accurately priced.
So as long as there is a risk instability over time they eill have the ability to provide a service worth paying for.
Rather than a magical death clock, let's say that actuarial science gets to the point where it can figure out an individual's life expectancy ±5 years with a 90% hit rate. The possibility of being hit by a bus or having some unknown wild-card disease means you could die much younger, and you might beat the odds and die much older, but 90% of people die within their predicted range.
Now, Bob goes to sign up for life insurance and he's predicted to die at age 50. He really wants this insurance to ensure his family can survive without him, but the premiums are completely outrageous, so he passes. Alice is predicted to die at age 100 so her premiums are cheap, but she sees little point in it, so doesn't sign up.
In this world, I see a lot of accidental death insurance being sold, but almost no general life insurance. Some people would buy it, as it would have some utility, but not a whole lot.
- Don't showcase more wealth on Facebook than your tax reports suggest you should have, in particular if you're behind on taxes or otherwise in debt to the government. It's been confirmed that (our equivalent of) the IRS looks at Facebook profiles to determine whether a debtor isn't lying about being poor.
- Don't post photos (or get yourself tagged on them!) that imply you were anywhere but in your bed, if you have a medical leave with "stay in bed" clause. Since the insurance is paid by the government (out of social insurance), officials do check whether or not you're lying to them - especially because medical leave abuse is a common phenomenon in this country (in big part because of many, if not most, companies that are abusing their employees, forcing them to go on fake medical leaves just to catch a breather).
People I know are extra careful about the two things above, and no doubt there will be more things like this to come.
There are interconnections between the two, but there are pretty clear distinctions.
The auto industry isn't large in NY. When enough voters in NY decide the auto industry is doing something bad, no amount of lobbing from the industry will prevent the laws they don't like.
Politicians need votes. Money is not nearly as powerful as a voter who is informed.
We took measures to get serious about drunk driving because it increased the probability of car accidents, especially at night,and was killing people.
On the flip side, we mandate tamper evident seals in medicine because the rare event of tampering hurt a small number of people, but undermined the citizens faith in the institutions they depend on.
The mass shooting issue is like the pill bottle problem. It’s a serious matter with an obvious solution. At the end of the day, it’s a problem unleashed by marketing — as hunting and shooting sport participation evaporated, gunmakers were left with a problem. Now we have batshit crazy people with political power, which is a genie that will be difficult to put back in the bottle.
This is a bold statement. Why do you think the solutions are obvious? Do you believe this is a subject without nuance?
Look at the gun death rates in the northeast compared to the south.
You can also see the gun deaths broken down here.
As soon as you drop some of those requirements the numbers increase dramatically.
"I'm sorry, we cannot offer you a CleanSocial(TM) discount because your social media footprint is insufficient to properly inform us of your risk profile"
However, headlines like this are a good reminder to practice good social media hygiene; I've been careful about what I post and have a habit of deleting old Facebook posts from my teenage days.
(Seriously, can we please make it easier to remove comments/accounts from non-archive sites? There’s not a single person on earth that can survive a Willie Horton style campaign where everything you say is examined without context - it’s an abdication of responsibility on those running a community)
Don't forget that a paywall only enriches the owners of the site; it does nothing to ensure that journalists are compensated. If you want to fund artists, do it directly; paying an artist's owner and hoping that the owner is a good person is a losing strategy.
Meanwhile, I scarcely have a need for insurance. Come up and get me.
I don't live in the US but I have 5 insurance policies - home insurance (mandated by my bank for my mortgage), car insurance (mandated by having a car), health insurance (optional but less so if you live in the US), Travel insurance (traveling for work mandates I'm covered by a policy) and life assurance (the only actual optional one) - should I have to provide all of these groups my social media details even though I don't "want" to have them?
Further, whos to say they decide that by me not participating in "normal" activities online, that they won't decline or offer me a substantially worse policy?