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> There should be one pool, everyone’s in it, we spread risk, and the whole damn thing is simpler and easier to regulate. Call me naive, but I also always thou

> There should be one pool, everyone’s in it, we spread risk, and the whole damn thing is simpler and easier to regulate. 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?

daveFNbuck 8y ago
This is about life insurance, not health insurance.
- PavlovsCat 8y ago
  Sure, but the increase of granularization in insure in general was mentioned in the comment I responded to. 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.
closeparen 8y ago
The idea is correctly price the consequences of lifestyle choices. 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.
- erentz 8y ago
  > 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. 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.
- JamesBarney 8y ago
  1. It's hard to disentangle lifestyle choices from genetic ones. If someone is born with an insatiable appetite that means it's 10x harder for them to stay at a healthy weight compared to someone else is that a lifestyle choice of genetics? 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.
  - MRD85 8y ago
    In support of your comment, when talking about weight it's common to talk about "fast metabolisms" keeping people skinny. Studies have shown that metabolisms don't vary much at all. What does vary is how hunger signals work with different people. The people who complain about being too skinny and can't gain weight simply find it difficult to eat enough to gain weight. Their body tells them they're not hungry. If you force feed them they'll still gain weight. 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.
adrianN 8y ago
I thought the point of insurance is buying lower variance with higher expected costs. You can have that even if the insurer has perfect knowledge of the likelihood of whatever event you're insured against. If you have probability p to have to pay $X, I can sell you an insurance for $(p+my profit margin) * X. You get the benefit of lower variance at the cost of $(my profit margin) * X.

daveFNbuck 8y ago

This is about life insurance, not health insurance.

PavlovsCat 8y ago
Sure, but the increase of granularization in insure in general was mentioned in the comment I responded to. 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.

closeparen 8y ago

The idea is correctly price the consequences of lifestyle choices. 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.

erentz 8y ago
> 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. 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.
JamesBarney 8y ago
1. It's hard to disentangle lifestyle choices from genetic ones. If someone is born with an insatiable appetite that means it's 10x harder for them to stay at a healthy weight compared to someone else is that a lifestyle choice of genetics? 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.
- MRD85 8y ago
  In support of your comment, when talking about weight it's common to talk about "fast metabolisms" keeping people skinny. Studies have shown that metabolisms don't vary much at all. What does vary is how hunger signals work with different people. The people who complain about being too skinny and can't gain weight simply find it difficult to eat enough to gain weight. Their body tells them they're not hungry. If you force feed them they'll still gain weight. 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.

adrianN 8y ago

I thought the point of insurance is buying lower variance with higher expected costs. You can have that even if the insurer has perfect knowledge of the likelihood of whatever event you're insured against. If you have probability p to have to pay $X, I can sell you an insurance for $(p+my profit margin) * X. You get the benefit of lower variance at the cost of $(my profit margin) * X.