7 ms·

If an insurer is able to reduce (or recoup) costs from likelier risks, then the remaining insureds benefit from lower premiums. If the goal is providing subsid

• alpinisme 10mo ago
  Insurance that is maximally responsive to patient health changes in terms of cost (ie making healthier people pay less) ends up being an inefficient way of just having people pay for their healthcare directly. And it naturally means the people with highest premiums are the least likely to be able to afford it (the elderly, the disabled, those with chronic conditions that make them less likely to maintain high earning jobs steadily, etc)
  • Workaccount2 10mo ago
    The obvious retort to this is: "If I focused on my health, ate clean and exercised daily, why should I also be subsidizing Billy "video-games-are-my-exercise" fatass's chronic health conditions?" This is why there is a hyperfixation on shifting blame away from (failing) individuals. The logic breaks when Billy has to admit he just hates exercising. And yes, before you comment, I know "maybe Billy has (condition outside all control) so it's not on him". Please, see what I just said in the previous statement.
    • OverTheTetons 10mo ago
      Is the obvious retort to this: I don't think we should play arbiter for who has and hasn't lived a healthy enough life to still believe they should get healthcare?
      • Analemma_ 10mo ago
        Yeah, I think what Workaccount2 is not realizing is that there's no bottom to "you have higher risk factors, why should I pay for you?", and so once you start down that way you may not like where it ends up. Some hobbies have higher injury rates, why should I pay for your health care if you choose to play those? Some parts of the country have lower life expectancies, why should I pay for your health care if you choose to live there?
        • Workaccount2 10mo ago
          The actual realization, which usually comes years after the realization that there is no bottom, is that there is no top either. The battle along the spectrum of privatizing gains (lower healthcare premiums for a healthy lifestyle - high premiums for unhealthy lifestyle) vs socializing losses (paying $20/mo to get $1200/mo of care - paying $1200/mo for $0/mo of care) is constant and boundless in either direction.
          • ben_w 10mo ago
            But there is a bound in both directions? On end, it's "national insurance", functionally equivalent to fully-tax-funded healthcare like the NHS or the German system with several providers competing but regulated to near identical results, but moreso as the UK and Germany also has private care; on the other, it's the absence of insurance.
            • Workaccount2 10mo ago
              This is a macro problem larger than health insurance, and exists everywhere from employee bonuses, high school group project grades, handicap parking, gas prices, Everest summits, to gas prices. Those might all seem wildly disconnected, but they all have systems of unfair allocation to compensate for unequal outcomes. Generally national healthcare programs are entirely dependent on young healthy people paying into the system despite rarely needing it, and then hopefully enough dieing quick deaths or having multiple children to cover their costs. These rebalancing systems are artificial and humans are generally terrible at managing them.
    • ImPostingOnHN 10mo ago
      The entire purpose of health insurance is spreading risk across a wide and diverse risk pool. > why should I also be subsidizing Billy "video-games-are-my-exercise" fatass's chronic health conditions?" Nobody is asking you to: enrolling in insurance is a choice in the USA. Also, replace "chronic health conditions" with "unavoidable inherited genetic risk factors". We don't want Billy to be screwed for life just because he was born to a suboptimal combination of parents.
      • Workaccount2 10mo ago
        The most cataclysmic thing that could happen to healthcare would be chronically healthy individuals creating their own health insurance.
        • ImPostingOnHN 10mo ago
          Not really (in fact that doesn't even make sense), but in any case, I think you replied to the wrong post. Your reply doesn't seem to have anything to do with the post it replied to
          • Workaccount2 10mo ago
            You said enrolling in insurance was a choice. If everyone with a BMI under 22 who did at least an hour of cardio a week had their own health insurance club, they would be doing excellent with cheap premiums and great care, while everyone else drowned in medical debt as their plans collapsed. The choice right now is all or nothing. There is no choice for healthy people to only share a plan with other healthy people. If there was, everyone else, especially the least healthy, would be totally screwed.
            • ImPostingOnHN 10mo ago
              I am still having trouble understand how that pertains to the post to which it replied. Here are those 2 points again: 1. In the US, enrolling in health insurance is currently a choice (I'm can't tell whether your hypothesis about healthy people is agreeing or disagreeing with this point). 2. We don't want Billy to be screwed for life just because he was born to a suboptimal combination of parents. Would you mind clarifying the connection here, please?
    • duskdozer 10mo ago
      It also fails to take into account the fact that eating clean and exercising daily doesn't eliminate your risk of getting cancer at age 40 or having your car's brakes fail randomly.
      • Workaccount2 10mo ago
        Its dumb to create an insurance program using anecdotes. The system can accommodate (and frankly is the ideal many people strive for) some health nut getting long drawn out cancer battle at 41. Its rare enough to be noise in the giant money payout pool. Obesity and it's litany of health effects are not rare, and next to age, are a dominating signal drawing money from the pool.
    • alpinisme 10mo ago
      In some respects, the ideal world is one in which everyone’s premiums are tied to a free and easy Apple Watch-like device that silently tracks exercise, blood sugar at a frequency that can tell when you ate a big dessert, air quality (and the presence of smoke or pollution), blood alcohol content, whether you are in speeding cars, whether you are participating in dangerous sports, etc. Such a system would directly confront individuals with the cost of their behaviors in an economic way, probably leading many or even most people to improve their habits in the aggregate. But such a system comes at other costs that most people intuitively feel infringes on core values they have. Edit to add: this system would actually have some great advantages over an “existing conditions” tax in that now you pay low rates until you have diabetes, all during the time you are leading the unhealthy lifestyle. But once you have it you are not rewarded for starting to exercise and eat healthy and get it under control. In the hypothetical scenario above, you’d be punished economically during the period you were building bad habits and you would be able to restore sane costs after course correction
      • Terr_ 10mo ago
        There's a similar phenomenon when people grouse about paying taxes for "roads I don't even use." Even if we assume zero indirect benefits, the billing infrastructure necessary to truly achieve that goal would create a creepy panopticon of constant surveillance. This is difficult to convey to certain brands of self-styled libertarians.
        • xigoi 10mo ago
          The government already knows whether you have a car. What more information would they need?
        • tonyedgecombe 10mo ago
          > creepy panopticon of constant surveillance Which we have anyway. We might as well get some benefits from it.
    • FireBeyond 10mo ago
      > "If I focused on my health, ate clean and exercised daily, why should I also be subsidizing Billy "video-games-are-my-exercise" fatass's chronic health conditions?" Then why are you not asking your insurer why they cover a lot less preventative health or other options. For example, Kaiser flat out refuses to prescribe GLP-1s for weight loss, others insurers are the same with gym subsidies or not covering nutritionists. But they'll happily pay for your gastric bypass.
  • IanCal 10mo ago
    > Insurance that is maximally responsive to patient health changes in terms of cost (ie making healthier people pay less) ends up being an inefficient way of just having people pay for their healthcare directly. That's true for predictable costs, but not true for unpredictable ones - which is the point of most insurance (housing, car, etc). The point and use of insurance is to move risk to entities that can bear it. Utility is non-linear with money, and so you easily have situations where spending X times more on something "costs" you more than X times if measured in how useful the money is to you. Typically, as you have more money, each further dollar doesn't provide as much benefit as the last (sometimes things are lumpy, the difference between "not quite enough to pay rent" and "just enough to pay rent" is huge, but broadly this is true). Going from $1000 to $10000 is more impactful than $1001000 to $1010000. That means that moving the other way, each additional dollar spent has a greater personal cost to you. Therefore, sharing unlikely but high expenses can mean that your expected cost is the same (if there's no profit/middleman) or a bit higher, but your expected personal cost is lower.
• SpicyLemonZest 10mo ago
  We agree that insurance is not the right way to handle health as a product, since some people predictably need much more medical treatment than others. But it’s how the US has chosen to do it, so we have to do it in a way that works. Correctly identifying a systemic issue won’t pay your medical bills.
  • lotsofpulp 10mo ago
    That is not how the US has chosen to do it. The ACA prohibits using anything other than age, location, and tobacco use for premium pricing, and the ACA prohibits denying coverage (resulting in a wealth transfer from healthy to sick). Even the age rating factor is capped at 3, so there are also massive wealth transfers from young to old. Mathematically, health insurance premiums in the US are more tax than insurance premium.
    • trollbridge 10mo ago
      The ACA doesn't prevent some magical fairy-dust AI from pricing premiums, though, which is currently all the rage amongst insurers. (Not because AI will be accurate or anything, but because it offers a completely opaque pricing process.)
      • avalys 10mo ago
        Why not? If the only factors allowed to be used in settings premiums are age, location and smoking status, then those are the only parameters that could be input to an AI model, no?
        • kyboren 10mo ago
          Warning: I am not in this industry and the below is speculation: AIUI the idea is to predict the "correct" price for an individual premium, Y, which is restricted to being the result of some insurance model function, f(), that is itself restricted to the domain of age (A), location (L), and smoking status (S): Y = f(A, L, S) My impression was that the idea was that this would handicap insurers' natural desire to price premiums individually and have a smoothing effect on prices over the population. But why is location useful for insurers to price premiums? I assume because healthcare has different costs in different locations, and different utilization rates: People living in coal mining towns or near oil refineries may be expected to use more healthcare and thus cost more to insure. Thus, you can imagine insurers building a price map (like a heat map) overlay for the state/country, plotting each applicant on it, and checking the "color" there as part of their model function. So they are effectively embedding out-of-band information (prices and utilization rates for locations) into the model function f() itself. What "AI", or large-parameter Deep Neural Networks, fundamentally change here is: - They can approximate any effectively computable function, the same class of functions that a programmer can write and execute on a computer[0]. - They can be scaled up to an arbitrarily large number of parameters, i.e. an arbitrarily precise approximation limited only by the number of parameters and the amount and quality of model training data. - Absolutely critically: They are programmed implicitly, through brute-force training on input-output pairs, rather than explicitly, with some programmer writing an explicit series of instructions to compute the function. This last point is probably the most important. Large insurers previously had sophisticated models for f() hand-built by math whizzes, but they were limited in the amount of out-of-band information they could encode into that function by the limited cognitive and programmatic capacity of a human team. But now with DNNs you can scalably encode unlimited out-of-band information into the function f(), while also totally obscuring how you're computing that location-based price adjustment. The result, in extremis, is that f() is not some fancy algorithm cooked up by a few dozen math whizzes. Instead f() becomes a fancy database, allowing the tuple (A, L, S) to act merely as an index to an individualized premium Y, which defeats the entire purpose of restricting the domain of their model function. [0]: https://en.wikipedia.org/wiki/Universal_approximation_theorem https://en.wikipedia.org/wiki/Universal_approximation_theore...
• monooso 10mo ago
  Not a US citizen, so a genuine question: do US health insurance companies have a track record of passing on such savings to consumers? That has not been my impression as an outside observer.
  • lotsofpulp 10mo ago
    Health insurance companies in the US are not allowed to deny coverage, and can only price premiums based on age (highest premium capped at 3x lowest premium, location, and tobacco use. https://www.healthcare.gov/coverage/pre-existing-conditions/ https://www.healthcare.gov/coverage/pre-existing-conditions/ https://www.healthcare.gov/how-plans-set-your-premiums/ https://www.healthcare.gov/how-plans-set-your-premiums/ Health insurance premiums in the US are more tax than insurance. They also have low single digit profit margins with less than desirable shareholder returns (many are non profit in the first place), so they don’t have much room to lower premiums without also reducing healthcare expenses. The insurance business in general is very competitive and not very profitable, so an insurer that tries to collect outsized premiums will usually suffer a loss of business.
    • monooso 10mo ago
      > The insurance business in general is very competitive and not very profitable... Knowing several Americans, and how much they pay for health insurance (and are still required to pay for some things "out of pocket"), this is incredible to me. And that's before you even get to the process of making a claim. Such a broken system.
  • zdragnar 10mo ago
    Ostensibly, the Affordable Care Act was supposed to reduce the average family's premiums by $2,500 a year. When that didn't happen, the story changed to that number being how much more premiums would have risen. Insurance premiums have only gone up as far as I can remember, though there's a ton of variables at play here. Inflation is an obvious one, plus continual introduction of more and more costly treatments- biologic injections, cancer therapies and so forth. The unfortunate increase in obesity rates in my lifetime (along with all the health complications) has been a significant contributor as well. It all adds up.