5 ms·

So, in economics 101, the concept of insurance was clearly explained, and by basic definition, the more fractured the pool the worse the outcome. I haven't rea

So, in economics 101, the concept of insurance was clearly explained, and by basic definition, the more fractured the pool the worse the outcome. I haven't really understood why America finds that this law doesn't hold over its population. And I've also looked at outcomes and found that once you start looking at costs/bed and patient coverage, any other first world country with a working single payer system provides significantly better outcomes. The things that America does better are things like cutting edge cancer care, or cutting edge X treatment, but these are accessible to the richest of the rich (and I've seen family members who can afford it vs family members who can't - we are talking 1% of a nation). So why do things like "make plans for not so healthy people" come up as concepts. The probability for a non healthy person to get sick is 1. At this point its like a scholarship to go to get medical care. If I were a medicare company, I would instead keep shafting the healthy people, fight tooth and nail to keep that population, and call it a day. For the sick people - why bother? (1) I really don't get America when it comes to this (and many other things, which you guys used to be world leaders in) Why? And edit: And to prevent (1), you would have to create regulation, something expressly disagreed with in the parent comment. Matter of fact, when I have pursued this with others or read threads, people come up with yet more complex market systems to deal with the skewed incentives, in order to avoid regulation.

deleted 10y ago
[deleted]
cronjobber 10y ago
> economics 101 ... the more fractured the pool the worse the outcome. You're probably (I don't know) talking about large insurers being able to aggregate non-correlated risk into a nice non-risky positive expectation of profit. But of course econ 101 loves nothing more than to look at the margin, and if the marginal client simply lowers expected profit, you better fracture him out. But you clearly know that, so what are you talking about?
- intended 10y ago
  Right - and that's why insurance is discussed as the extra-ordinary case where the normal market rules result in worse outcomes. More competition results in a worse functioning market. Therefore for ideal outcomes you don't create separate insurers, and no one moves out. My question isn't on the economics, to be honest. My question is on the weird cultural idiosyncrasy. I don't really understand that (and by that I mean I understand its "political", but the math and success of it is pretty clear, so how is the topic successfully made confusing). That's the real magic at play, and thats what I'd like insight about.
  - cronjobber 10y ago
    > My question isn't on the economics, to be honest No, your question isn't, mine is. I still don't really know what "Econ 101" (i.e., basic) market failure you're talking about. Can you explain like I knew enough jargon to understand an Econ 101 explanation but slept through that one lesson? Intrinsic economies of scale producing oligopolistic structures in insurance – I've seen that mentioned as a market failure, but it would be strange to fix a tendency towards oligopoly by legalizing it into a total monopoly, no? So you're not talking about that.

deleted 10y ago

[deleted]

cronjobber 10y ago

> economics 101 ... the more fractured the pool the worse the outcome. You're probably (I don't know) talking about large insurers being able to aggregate non-correlated risk into a nice non-risky positive expectation of profit. But of course econ 101 loves nothing more than to look at the margin, and if the marginal client simply lowers expected profit, you better fracture him out. But you clearly know that, so what are you talking about?

intended 10y ago
Right - and that's why insurance is discussed as the extra-ordinary case where the normal market rules result in worse outcomes. More competition results in a worse functioning market. Therefore for ideal outcomes you don't create separate insurers, and no one moves out. My question isn't on the economics, to be honest. My question is on the weird cultural idiosyncrasy. I don't really understand that (and by that I mean I understand its "political", but the math and success of it is pretty clear, so how is the topic successfully made confusing). That's the real magic at play, and thats what I'd like insight about.
- cronjobber 10y ago
  > My question isn't on the economics, to be honest No, your question isn't, mine is. I still don't really know what "Econ 101" (i.e., basic) market failure you're talking about. Can you explain like I knew enough jargon to understand an Econ 101 explanation but slept through that one lesson? Intrinsic economies of scale producing oligopolistic structures in insurance – I've seen that mentioned as a market failure, but it would be strange to fix a tendency towards oligopoly by legalizing it into a total monopoly, no? So you're not talking about that.