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The paradox is that the better insurance companies are at pricing risk, the more irrelevant their business becomes. If they can predict your disease with 100% r
by cm2187 1y ago
The paradox is that the better insurance companies are at pricing risk, the more irrelevant their business becomes. If they can predict your disease with 100% reliability, and charge you based on that, then what is the point of buying insurance if you are going to be charged either nothing or the full cost of the treatment, just like if you were not insured.
Except of course in the US, with scammy hospitals charging over-inflated prices to uninsured patients, while only insurers can access realistic prices.
- Terr_ 1y agoI think that conflates accurate probabilities with predicting discrete future events. For example, suppose you can accurately determine that someone has exactly a 5% chance of developing a problem that will cost exactly $X to treat. Find 10,000 of those people, and insurance is still useful for spreading the risk and financing the treatments.
- lotsofpulp 1y agoHealth problems and healthcare is not that simple. Almost everyone will experience healthcare issues in their life, so the insurance becomes more of a subsidy mechanism to time shift costs from one population to another (which at some point becomes indistinguishable from taxpayer funded healthcare, just with a different administrator). Also, legislation requires health insurance to pay for all healthcare, so there is no point paying to insure against specific ailments.
- sidewndr46 1y agoThis isn't really true in the US, I have specific policies that insure me against other types of illness. They pay directly to me in the form of a predetermined cash settlement in the event of a diagnosis.
- lotsofpulp 1y agoThe Affordable Care Act does not allow for benefit maximums. Necessary healthcare beyond the out of pocket maximum is (theoretically) required to be paid for by the insurer. You might have supplemental insurance that pays you in case of a specific illness, but that is not what is commonly referred to as health insurance. Can you provide a link to a business selling the type of policy you are referring to? I am curious what these look like.
- cm2187 1y agoAt 5% you are still loosely predicting a disease, but with progress in generics you may be one day predicting with a 80% accuracy. The insurance premium will converge to cost of treatment.