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I'm having difficulty parsing your prediction. Are you saying that in a free market, nobody would offer insurance against the possibility of developing a rare,

by philh 13y ago

I'm having difficulty parsing your prediction. Are you saying that in a free market, nobody would offer insurance against the possibility of developing a rare, expensive medical problem? Or that once you've developed an expensive medical condition, you'll no longer be able to get insurance against it? Or something else?

ThomPete 13y ago
Its not just that. The problem is that for the insurance to work optimally everyone have to chip in so that those that are healthy offset the cost of those that aren't. In the US the young aren't getting insurance which is one of the reasons for the Offordable Healthcare Act. To force everyone to have an insurance so that economics become better. Of course in reality the best possible system would be a single payer (tax based) healthcare system with some payment for usage but where no one can go bankrupt or be dropped or fall under the deadly pre-existing conditions clause. Or a mandated private insurance like in Germany & Switzerland. Obamacare is one step of that way but it's so alien to US culture and have been so poorly implemented that on could fear for its future.
- virtualritz 13y ago
  > Or a mandated private insurance like in Germany [...] There is no mandated /private/ health insurance, there is just mandated health insurance in Germany. See e.g. http://www.slowtravelberlin.com/guide-health-insurance-germany/ http://www.slowtravelberlin.com/guide-health-insurance-germa...
  - ThomPete 13y ago
    Thats true but I don't think that is as important for the point I am making, but sure.
michaelt 13y ago
Assume you were an insurance company executive and you wanted to maximize profit and you were indifferent to the plight of your customers. What would you do? I'd release new products regularly, while increasing the insurance premiums of old products. Healthy people would just switch to the new product to avoid the price increase, but people with pre-existing conditions wouldn't be eligible so I could price-gouge them. So you could get insurance against expensive medical conditions - but if you had to claim on that insurance, suddenly your premiums would start rising by 30% a year, and you would have no alternative because of your pre-existing condition. The companies that didn't engage in this would then look expensive to healthy people and attractive to unhealthy people. And if the healthy (profitable) people leave and unhealthy (subsidized) people join, meaning premiums have to go up further, you could get a chain reaction putting them out of business.
- swombat 13y ago
  So you could get insurance against expensive medical conditions - but if you had to claim on that insurance, suddenly your premiums would start rising by 30% a year, and you would have no alternative because of your pre-existing condition. To bolster this example, I hear from my parents that this is more or less what's happened to insurance premiums in Switzerland since some idiot in government deregulated the insurance industry.
- sheepmullet 13y ago
  I think a free market insurance system would basically end up paying out lump sums for various illnesses and conditions. Hospitals would publish average price lists and then insurers would advertise and pay based on that. Get lung cancer? Here take $200k courtesy of your insurance. Only going to cost you $150k? "No problem, glad you found a cheaper place. Buy a nice gift for your wife with the difference"
  - pekk 13y ago
    Anyone would pay a slightly smaller premium in exchange for the awarded sum being limited to actual incurred/billed costs
    - sheepmullet 13y ago
      Pretty good insurance company to be able to offer a smaller premium when they have to cover the exact same costs on average when they have 10x the overheads of a company that pays lump sums. Not to mention you are by necessity limited by the hospital and doctors on the insurance companies approved docs list. No thanks; they don't have my interests at heart. Not to mention the very real incentive for such an insurance company to stop paying for "problem" clients with long ongoing illnesses.
      - michaelt 13y ago
        If 25% of lung cancer cases cost less than $150,000 to treat, 50% cost less than $200,000 to treat, 75% cost less than $250,000 to treat, 99% cost less than $500,000 to treat and 99.999% cost less than $2,000,000 to treat, how much would the insurance company pay out for lung cancer?

by philh 13y ago

ThomPete 13y ago

Its not just that. The problem is that for the insurance to work optimally everyone have to chip in so that those that are healthy offset the cost of those that aren't. In the US the young aren't getting insurance which is one of the reasons for the Offordable Healthcare Act. To force everyone to have an insurance so that economics become better. Of course in reality the best possible system would be a single payer (tax based) healthcare system with some payment for usage but where no one can go bankrupt or be dropped or fall under the deadly pre-existing conditions clause. Or a mandated private insurance like in Germany & Switzerland. Obamacare is one step of that way but it's so alien to US culture and have been so poorly implemented that on could fear for its future.

virtualritz 13y ago
> Or a mandated private insurance like in Germany [...] There is no mandated /private/ health insurance, there is just mandated health insurance in Germany. See e.g. http://www.slowtravelberlin.com/guide-health-insurance-germany/ http://www.slowtravelberlin.com/guide-health-insurance-germa...
- ThomPete 13y ago
  Thats true but I don't think that is as important for the point I am making, but sure.

michaelt 13y ago

Assume you were an insurance company executive and you wanted to maximize profit and you were indifferent to the plight of your customers. What would you do? I'd release new products regularly, while increasing the insurance premiums of old products. Healthy people would just switch to the new product to avoid the price increase, but people with pre-existing conditions wouldn't be eligible so I could price-gouge them. So you could get insurance against expensive medical conditions - but if you had to claim on that insurance, suddenly your premiums would start rising by 30% a year, and you would have no alternative because of your pre-existing condition. The companies that didn't engage in this would then look expensive to healthy people and attractive to unhealthy people. And if the healthy (profitable) people leave and unhealthy (subsidized) people join, meaning premiums have to go up further, you could get a chain reaction putting them out of business.

swombat 13y ago
So you could get insurance against expensive medical conditions - but if you had to claim on that insurance, suddenly your premiums would start rising by 30% a year, and you would have no alternative because of your pre-existing condition. To bolster this example, I hear from my parents that this is more or less what's happened to insurance premiums in Switzerland since some idiot in government deregulated the insurance industry.
sheepmullet 13y ago
I think a free market insurance system would basically end up paying out lump sums for various illnesses and conditions. Hospitals would publish average price lists and then insurers would advertise and pay based on that. Get lung cancer? Here take $200k courtesy of your insurance. Only going to cost you $150k? "No problem, glad you found a cheaper place. Buy a nice gift for your wife with the difference"
- pekk 13y ago
  Anyone would pay a slightly smaller premium in exchange for the awarded sum being limited to actual incurred/billed costs
  - sheepmullet 13y ago
    Pretty good insurance company to be able to offer a smaller premium when they have to cover the exact same costs on average when they have 10x the overheads of a company that pays lump sums. Not to mention you are by necessity limited by the hospital and doctors on the insurance companies approved docs list. No thanks; they don't have my interests at heart. Not to mention the very real incentive for such an insurance company to stop paying for "problem" clients with long ongoing illnesses.
    - michaelt 13y ago
      If 25% of lung cancer cases cost less than $150,000 to treat, 50% cost less than $200,000 to treat, 75% cost less than $250,000 to treat, 99% cost less than $500,000 to treat and 99.999% cost less than $2,000,000 to treat, how much would the insurance company pay out for lung cancer?