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Getting insurance as an individual is expensive because you’re not part of a group plan. With a group plan the insurance company has some reason to believe you’

Getting insurance as an individual is expensive because you’re not part of a group plan. With a group plan the insurance company has some reason to believe you’re not collectively a bunch of dying people committing moral hazard, you’re just one of a generally similar looking company workforce. If employers stopped providing it, I think it is presumed that the mentality towards individual plans would change

2sk21 7y ago
Well, one way of looking at it is that the general population is the biggest group possible :-)
- throwaway66920 7y ago
  Sort of. This is true if everyone is required to participate in the system. And there’s only one provider. If you imagine there being a cheap plan and an expensive plan, you would probably expect that the expensive plan is a way better return on the dollar because there are fewer poor people on it weighing it down (because poor people are likely to have more health issues). True meaning it averages out to a reasonably healthy person
  - throwaway_law 7y ago
    >you would probably expect that the expensive plan is a way better return on the dollar because there are fewer poor people on it weighing it down It is unfortunately true in the US (probably everywhere) there is worse health/higher incidences of chronic conditions in the poor (mostly because all chronic conditions are diet related). However, in the US the biggest weight would be the elderly who have chronic conditions at a higher rate than any other demographic (generally due to a lifetime of poor diet combined with irregular care over their life to treat the conditions until they are Medicare), but thats the irony these are the people already covered by Government healthcare (and they seem fairly happy with it. Its time to extend it to everyone.
erichocean 7y ago
> Getting insurance as an individual is expensive because you’re not part of a group plan. I see people say this constantly. Insurance by definition is literally always a "group plan"—everyone who buys insurance is in the same group. That's literally the point of insurance. It's why it exists. That's what it is. That is fundamentally how insurance works. All insurance, in every category, of every type. There are no exceptions. Insurance always pools risk across all payers (everyone is in the "group"), and then you expect only a fraction (but we don't know which fraction, of course) to require a payout in any given payment period. If you're selling something that doesn't work like that, then it's not insurance—by definition.
- throwaway66920 7y ago
  You see it constantly because it is true. A group plan is a thing. Yes you’re still in a “group” when you register as an individual, but it is an “individual plan” and semantics doesn’t really help you out. The difference is that if I know the mean and variance of expected health costs for the group, I can offer a lower premium to every individual member because the variance of total actual cost goes down by n^(-1/2) and I don’t need to cover my butt as much. Especially since almost all group plans are centered around relatively healthy working age people. The privilege of group plans is you’re in a healthier subset. Individual plans are for people not on those plans and they suck dickballs. There is a high chance of moral hazard. There’s more retired old people. You offer little value to the insurance company so you don’t get to negotiate like a group plan does.
  - erichocean 7y ago
    > There’s more retired old people. Medicare is mandatory in the US for retired old people. It's universal, it's mandatory, and it covers everything. They're literally not in the insurance pools, so I don't know what you're talking about. As for the "group plans", those "groups" are too small for insurance purposes—they do not spread risk effectively. The entire "group plan" thing is a scam, and it would be trivial for gov't to just outlaw them entirely in the US, and force individual pricing on business-purchased health insurance like we do for every other kind of insurance we have. Costs would go down for everyone, and individual plans would no longer "suck dickballs". That said, that is not how I would "fix" the health insurance issues we have. But it's at least better than what we do now...
cwkoss 7y ago
I think it is unfair to call a dying people seeking healthcare 'moral hazards'
- throwaway66920 7y ago
  It’s kind of created by the immoral environment of private insurance, but I would argue someone who doesn’t have health insurance to save a few backs, who can otherwise afford it, and waits until they suddenly have $100k expenses incoming to get insurance is a moral hazard even if they’re going to die. Imagine there were no private companies but a perfect decentralized blockchain shamwow insurance system that magically worked and distributed all profits back to its participants. I would think the dying man is committing moral hazard here. But it’s up for debate. If you do this against a big private insurance company and they lose a penny, it doesn’t sound so bad, but I’m not convinced

2sk21 7y ago

Well, one way of looking at it is that the general population is the biggest group possible :-)

throwaway66920 7y ago
Sort of. This is true if everyone is required to participate in the system. And there’s only one provider. If you imagine there being a cheap plan and an expensive plan, you would probably expect that the expensive plan is a way better return on the dollar because there are fewer poor people on it weighing it down (because poor people are likely to have more health issues). True meaning it averages out to a reasonably healthy person
- throwaway_law 7y ago
  >you would probably expect that the expensive plan is a way better return on the dollar because there are fewer poor people on it weighing it down It is unfortunately true in the US (probably everywhere) there is worse health/higher incidences of chronic conditions in the poor (mostly because all chronic conditions are diet related). However, in the US the biggest weight would be the elderly who have chronic conditions at a higher rate than any other demographic (generally due to a lifetime of poor diet combined with irregular care over their life to treat the conditions until they are Medicare), but thats the irony these are the people already covered by Government healthcare (and they seem fairly happy with it. Its time to extend it to everyone.

erichocean 7y ago

> Getting insurance as an individual is expensive because you’re not part of a group plan. I see people say this constantly. Insurance by definition is literally always a "group plan"—everyone who buys insurance is in the same group. That's literally the point of insurance. It's why it exists. That's what it is. That is fundamentally how insurance works. All insurance, in every category, of every type. There are no exceptions. Insurance always pools risk across all payers (everyone is in the "group"), and then you expect only a fraction (but we don't know which fraction, of course) to require a payout in any given payment period. If you're selling something that doesn't work like that, then it's not insurance—by definition.

throwaway66920 7y ago
You see it constantly because it is true. A group plan is a thing. Yes you’re still in a “group” when you register as an individual, but it is an “individual plan” and semantics doesn’t really help you out. The difference is that if I know the mean and variance of expected health costs for the group, I can offer a lower premium to every individual member because the variance of total actual cost goes down by n^(-1/2) and I don’t need to cover my butt as much. Especially since almost all group plans are centered around relatively healthy working age people. The privilege of group plans is you’re in a healthier subset. Individual plans are for people not on those plans and they suck dickballs. There is a high chance of moral hazard. There’s more retired old people. You offer little value to the insurance company so you don’t get to negotiate like a group plan does.
- erichocean 7y ago
  > There’s more retired old people. Medicare is mandatory in the US for retired old people. It's universal, it's mandatory, and it covers everything. They're literally not in the insurance pools, so I don't know what you're talking about. As for the "group plans", those "groups" are too small for insurance purposes—they do not spread risk effectively. The entire "group plan" thing is a scam, and it would be trivial for gov't to just outlaw them entirely in the US, and force individual pricing on business-purchased health insurance like we do for every other kind of insurance we have. Costs would go down for everyone, and individual plans would no longer "suck dickballs". That said, that is not how I would "fix" the health insurance issues we have. But it's at least better than what we do now...

cwkoss 7y ago

I think it is unfair to call a dying people seeking healthcare 'moral hazards'

throwaway66920 7y ago
It’s kind of created by the immoral environment of private insurance, but I would argue someone who doesn’t have health insurance to save a few backs, who can otherwise afford it, and waits until they suddenly have $100k expenses incoming to get insurance is a moral hazard even if they’re going to die. Imagine there were no private companies but a perfect decentralized blockchain shamwow insurance system that magically worked and distributed all profits back to its participants. I would think the dying man is committing moral hazard here. But it’s up for debate. If you do this against a big private insurance company and they lose a penny, it doesn’t sound so bad, but I’m not convinced