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The problem is that heath insurance has widely different risk profiles, way more than something like car insurance. The most risky car driver is going to cost t

The problem is that heath insurance has widely different risk profiles, way more than something like car insurance. The most risky car driver is going to cost the insurance company a lot less than the most expensive medical insurance user. Because of this, an individual buyer of health insurance is going to have a hugely variable cost of insurance, based on their risk profile. Currently, this risk is spread out by grouping employees of a company together, spreading the cost. That is why larger companies get much cheaper rates. Health insurance risk is so varied, and so often not something the individual can control, that the only fair and efficient way to insure everyone is to create a single, large, cohort... spread the risk to every citizen via universal coverage.

nine_zeros 4y ago
> The problem is that heath insurance has widely different risk profiles, way more than something like car insurance. The most risky car driver is going to cost the insurance company a lot less than the most expensive medical insurance user. That's the point. The insurance business can only exist if it can pay for healthcare of an "average pool". They cannot just go seek the healthiest people for group coverage any more. They must maintain their business and profits for the "average pool". There are a large number of ways to provide such an insurance. They can negotiate with providers, drug distributors, invest in securities, improve productivity with technology and even cut CEO pay so that their intake of premiums <= outlay for insurance. That's it. If insurance companies can't manage costs, they will have to raise premiums. Because of 24/7 open enrollment, people will exit any insurance provider that raises premiums too much. If the insurance company can't compete, they will have to file for bankruptcy and customers can just go to another insurance provider. The risk-based business model that exists today is predatory. It does not have to be this way. Most other countries with private insurance don't have the American predatory system either.

nine_zeros 4y ago

> The problem is that heath insurance has widely different risk profiles, way more than something like car insurance. The most risky car driver is going to cost the insurance company a lot less than the most expensive medical insurance user. That's the point. The insurance business can only exist if it can pay for healthcare of an "average pool". They cannot just go seek the healthiest people for group coverage any more. They must maintain their business and profits for the "average pool". There are a large number of ways to provide such an insurance. They can negotiate with providers, drug distributors, invest in securities, improve productivity with technology and even cut CEO pay so that their intake of premiums <= outlay for insurance. That's it. If insurance companies can't manage costs, they will have to raise premiums. Because of 24/7 open enrollment, people will exit any insurance provider that raises premiums too much. If the insurance company can't compete, they will have to file for bankruptcy and customers can just go to another insurance provider. The risk-based business model that exists today is predatory. It does not have to be this way. Most other countries with private insurance don't have the American predatory system either.