3 ms·

"I personally, won't support anything that makes me pay for your health insurance." Um, that's kinda the point of any kind of insurance.

by brazzy 14y ago

lutusp 14y ago
> "I personally, won't support anything that makes me pay for your health insurance." > Um, that's kinda the point of any kind of insurance. No, the point of insurance is not to buy into or share the risk of others, but to amortize one's own risk over time. An insurance policy can have a single applicant and still function as it should -- the issuer is betting that the applicant won't suffer a loss, the applicant is betting that he will. An actuary sets the rate based on his best guess about the possibility of a claim. This thesis is proven by the classic alternative to buying insurance -- self-insurance, a scheme in which an individual sets aside his own cushion against loss, or "self-insures" -- accepts risk using his own resources. Many states will accept an alternative to otherwise mandatory car insurance -- a personal bond against claims. The advantage to the individual is that the bond can earn money as an investment while it stands as proof of personal responsibility. So the idea that insurance means joining a pool of insured individuals may be true in many cases, but it isn't a requirement for insurance to function. And it certainly isn't "the point".
- Confusion 14y ago
  the issuer is betting that the applicant won't suffer a loss, the applicant is betting that he will. An actuary sets the rate based on his best guess about the possibility of a claim. Emphatically: no! The issuer is betting that in the entire group of clients the total loss will be smaller than the rates they set. Almost nobody can ever financially deal with the greatest risk health insurance insures against. Health insurance is almost never about amortizing your own risk. It is about insuring against risks you couldn't possibly deal with otherwise. Almost nobody can pay for a long stay on the IC after an accident, with months of rehabilitation afterwards. When you need the insurance, it's the money of the other clients, that with hindsight never needed the insurance, that pays for your costs. Of course obligatory health insurance is pure socialism (not in the pure 'political movement' sense of the word, but in the 'common usage' sense of the word, meaning forced sharing of a population's resources for a specific greater good) and thank God for it. I'll take my Western European social democracy over your government any day. I gladly pay taxes to have it this way.
  - lutusp 14y ago
    > When you need the insurance, it's the money of the other clients, that with hindsight never needed the insurance, that pays for your costs. This is the normal approach, but it's a coincidence -- the insurance system doesn't collapse if it's not the model. Insurance can equally be a case of one policy, one client, all depending on what's being insured -- see below. > Emphatically: no! The issuer is betting that in the entire group of clients the total loss will be smaller than the rates they set. My point is that system works with one client the same way as with 10,000. It's a matter of accurately assessing the risk of a claim. Insurance doesn't suddenly stop working because there are few clients or only one client. Multiple clients is the usual case, but it's not required for the system to work. Large insurance houses will very happily write a policy that only applies to one person: http://voices.yahoo.com/bizarre-insurance-policies-famous-celebrities-345391.html http://voices.yahoo.com/bizarre-insurance-policies-famous-ce... A quote: "America Ferrera is the newest addition to the list of stars who have some of their body parts insured. Famous for her role as Betty Suarez in the top-rating ABC sitcom "Ugly Betty", Ferrera has had her smile insured for 10 million dollars by Lloyds of London." One person, one smile, one client, one policy.
    - CJefferson 14y ago
      No, Lloyds of London have huge numbers of clients. There is not one person / group of people who will personally lose a huge amount of money if that pays out. The money will come from someone else's car insurance not paying out.
- brazzy 14y ago
  No, the point of insurance is not to buy into or share the risk of others Yes, that is exactly the point of insurance. Everything you wrote is wrong, sorry.
  - lutusp 14y ago
    The model where there are many clients and one policy is the norm, but that doesn't mean the system requires it. If insurers went to the trouble of making it work, you could have individual policies written up for each and every client, and sell the risk to subscribers (as is done with mortgages). Example: http://voices.yahoo.com/bizarre-insurance-policies-famous-celebrities-345391.html http://voices.yahoo.com/bizarre-insurance-policies-famous-ce... A quote: "America Ferrera is the newest addition to the list of stars who have some of their body parts insured. Famous for her role as Betty Suarez in the top-rating ABC sitcom "Ugly Betty", Ferrera has had her smile insured for 10 million dollars by Lloyds of London." One person, one smile, one client, one policy. > Everything you wrote is wrong, sorry. It's generally thought good form to offer some evidence for your position, as I have for mine.
    - brazzy 14y ago
      You're right, my statement was too broad, but I submit that it is still correct for health insurance, when the goal is (I hope) to get affordable health care for everyone. The difference is that if vehicle insurance for your tank is unobtainable to prohibitively expensive, you can choose not to drive that tank. You have no choice in getting type 1 diabetes, or appendicitis, or an MRSA-infected bug bite.
      - lutusp 14y ago
        > You're right, my statement was too broad, but I submit that it is still correct for health insurance ... It's correct because the present system is set up that way. But this doesn't mean it must be that way, or that insurance requires a large pool of clients with the same policy and coverage. That's a coincidence. From the standpoint of a large publicly-held corporation, many clients with identical policies, or many clients each with unique personal policies, work internally exactly the same way -- it's all about actuaries assessing risk and setting rates. > I submit that it is still correct for health insurance, when the goal is (I hope) to get affordable health care for everyone. Regardless of the business model, if health costs cannot be controlled, insurers will refuse to write the policies. This outcome doesn't depend on the assumptions behind the program -- whether there is a large program with many identically covered clients, or a program in which each client has a unique policy and the capital pool is the corporation's stockholders rather than the policy holders. In both cases, some circumstances are unworkable. It remains to be seen whether health costs can be meaningfully regulated, in order to make a mandatory health insurance requirement politically acceptable. I sincerely hope so, but I don't control health care costs.

"I personally, won't support anything that makes me pay for your health insurance." Um, that's kinda the point of any kind of insurance.

by brazzy 14y ago

"I personally, won't support anything that makes me pay for your health insurance." Um, that's kinda the point of any kind of insurance.

lutusp 14y ago

> "I personally, won't support anything that makes me pay for your health insurance." > Um, that's kinda the point of any kind of insurance. No, the point of insurance is not to buy into or share the risk of others, but to amortize one's own risk over time. An insurance policy can have a single applicant and still function as it should -- the issuer is betting that the applicant won't suffer a loss, the applicant is betting that he will. An actuary sets the rate based on his best guess about the possibility of a claim. This thesis is proven by the classic alternative to buying insurance -- self-insurance, a scheme in which an individual sets aside his own cushion against loss, or "self-insures" -- accepts risk using his own resources. Many states will accept an alternative to otherwise mandatory car insurance -- a personal bond against claims. The advantage to the individual is that the bond can earn money as an investment while it stands as proof of personal responsibility. So the idea that insurance means joining a pool of insured individuals may be true in many cases, but it isn't a requirement for insurance to function. And it certainly isn't "the point".

Confusion 14y ago
the issuer is betting that the applicant won't suffer a loss, the applicant is betting that he will. An actuary sets the rate based on his best guess about the possibility of a claim. Emphatically: no! The issuer is betting that in the entire group of clients the total loss will be smaller than the rates they set. Almost nobody can ever financially deal with the greatest risk health insurance insures against. Health insurance is almost never about amortizing your own risk. It is about insuring against risks you couldn't possibly deal with otherwise. Almost nobody can pay for a long stay on the IC after an accident, with months of rehabilitation afterwards. When you need the insurance, it's the money of the other clients, that with hindsight never needed the insurance, that pays for your costs. Of course obligatory health insurance is pure socialism (not in the pure 'political movement' sense of the word, but in the 'common usage' sense of the word, meaning forced sharing of a population's resources for a specific greater good) and thank God for it. I'll take my Western European social democracy over your government any day. I gladly pay taxes to have it this way.
- lutusp 14y ago
  > When you need the insurance, it's the money of the other clients, that with hindsight never needed the insurance, that pays for your costs. This is the normal approach, but it's a coincidence -- the insurance system doesn't collapse if it's not the model. Insurance can equally be a case of one policy, one client, all depending on what's being insured -- see below. > Emphatically: no! The issuer is betting that in the entire group of clients the total loss will be smaller than the rates they set. My point is that system works with one client the same way as with 10,000. It's a matter of accurately assessing the risk of a claim. Insurance doesn't suddenly stop working because there are few clients or only one client. Multiple clients is the usual case, but it's not required for the system to work. Large insurance houses will very happily write a policy that only applies to one person: http://voices.yahoo.com/bizarre-insurance-policies-famous-celebrities-345391.html http://voices.yahoo.com/bizarre-insurance-policies-famous-ce... A quote: "America Ferrera is the newest addition to the list of stars who have some of their body parts insured. Famous for her role as Betty Suarez in the top-rating ABC sitcom "Ugly Betty", Ferrera has had her smile insured for 10 million dollars by Lloyds of London." One person, one smile, one client, one policy.
  - CJefferson 14y ago
    No, Lloyds of London have huge numbers of clients. There is not one person / group of people who will personally lose a huge amount of money if that pays out. The money will come from someone else's car insurance not paying out.
brazzy 14y ago
No, the point of insurance is not to buy into or share the risk of others Yes, that is exactly the point of insurance. Everything you wrote is wrong, sorry.
- lutusp 14y ago
  The model where there are many clients and one policy is the norm, but that doesn't mean the system requires it. If insurers went to the trouble of making it work, you could have individual policies written up for each and every client, and sell the risk to subscribers (as is done with mortgages). Example: http://voices.yahoo.com/bizarre-insurance-policies-famous-celebrities-345391.html http://voices.yahoo.com/bizarre-insurance-policies-famous-ce... A quote: "America Ferrera is the newest addition to the list of stars who have some of their body parts insured. Famous for her role as Betty Suarez in the top-rating ABC sitcom "Ugly Betty", Ferrera has had her smile insured for 10 million dollars by Lloyds of London." One person, one smile, one client, one policy. > Everything you wrote is wrong, sorry. It's generally thought good form to offer some evidence for your position, as I have for mine.
  - brazzy 14y ago
    You're right, my statement was too broad, but I submit that it is still correct for health insurance, when the goal is (I hope) to get affordable health care for everyone. The difference is that if vehicle insurance for your tank is unobtainable to prohibitively expensive, you can choose not to drive that tank. You have no choice in getting type 1 diabetes, or appendicitis, or an MRSA-infected bug bite.
    - lutusp 14y ago
      > You're right, my statement was too broad, but I submit that it is still correct for health insurance ... It's correct because the present system is set up that way. But this doesn't mean it must be that way, or that insurance requires a large pool of clients with the same policy and coverage. That's a coincidence. From the standpoint of a large publicly-held corporation, many clients with identical policies, or many clients each with unique personal policies, work internally exactly the same way -- it's all about actuaries assessing risk and setting rates. > I submit that it is still correct for health insurance, when the goal is (I hope) to get affordable health care for everyone. Regardless of the business model, if health costs cannot be controlled, insurers will refuse to write the policies. This outcome doesn't depend on the assumptions behind the program -- whether there is a large program with many identically covered clients, or a program in which each client has a unique policy and the capital pool is the corporation's stockholders rather than the policy holders. In both cases, some circumstances are unworkable. It remains to be seen whether health costs can be meaningfully regulated, in order to make a mandatory health insurance requirement politically acceptable. I sincerely hope so, but I don't control health care costs.