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Part of the issue is that the insurance pool needs to include low risk individuals to work. If everyone under 30 says “I won’t shell out for private insurance,

Part of the issue is that the insurance pool needs to include low risk individuals to work. If everyone under 30 says “I won’t shell out for private insurance, and if something catastrophic happens, fuck it, I’ll declare bankruptcy”, the system falls apart for everyone. Unpopular as it is, this is the logic behind the ACA mandate. It’s a terrible outcome, unless you’re rich enough not to care about insurance to begin with. You get coverage that’s unaffordable for higher risk people who need it, and uninsured “healthy” people one stroke of bad luck away from disaster.

jandrewrogers 6y ago
That isn’t insurance. You don’t need low-risk people in the pool for insurance to work. Insurance premiums are technically derived from individual risk, not the risk of an arbitrary pool. Pooling is only done to reduce the tail risk of the underwriter, it doesn’t materially change individual premiums. You do need low-risk people in the pool if you want low-risk people to subsidize the insurance premiums of high-risk people. That is not insurance, that is just socializing the premiums of high-risk individuals. These distinctions matter when discussing policy. Socializing medical costs may be the appropriate policy choice but lets not smuggle it in by abusing a term of art like “insurance” which means something very different.
- imtringued 6y ago
  If you only get insurance once it is too late it is not insurance either. Insurers have a financial incentive to avoid paying for expensive care. If early or preventative care is cheaper they will administer it while you are "healthy".
- smogcutter 6y ago
  That is how your employer provided plan works, however. They negotiate a rate for the whole group, not an individual medical workup and premium for each individual. If you want to move away from that to “just pay me the equivalent comp directly and I’ll get my own insurance”, rates are going to get ugly.
- rbanffy 6y ago
  > Pooling is only done to reduce the tail risk of the underwriter, Which, in the case of an universal service, is also the insured.

jandrewrogers 6y ago

That isn’t insurance. You don’t need low-risk people in the pool for insurance to work. Insurance premiums are technically derived from individual risk, not the risk of an arbitrary pool. Pooling is only done to reduce the tail risk of the underwriter, it doesn’t materially change individual premiums. You do need low-risk people in the pool if you want low-risk people to subsidize the insurance premiums of high-risk people. That is not insurance, that is just socializing the premiums of high-risk individuals. These distinctions matter when discussing policy. Socializing medical costs may be the appropriate policy choice but lets not smuggle it in by abusing a term of art like “insurance” which means something very different.

imtringued 6y ago
If you only get insurance once it is too late it is not insurance either. Insurers have a financial incentive to avoid paying for expensive care. If early or preventative care is cheaper they will administer it while you are "healthy".
smogcutter 6y ago
That is how your employer provided plan works, however. They negotiate a rate for the whole group, not an individual medical workup and premium for each individual. If you want to move away from that to “just pay me the equivalent comp directly and I’ll get my own insurance”, rates are going to get ugly.
rbanffy 6y ago
> Pooling is only done to reduce the tail risk of the underwriter, Which, in the case of an universal service, is also the insured.