4 ms·

Then the article "lies" in the same way: "If the top 5% is the absolute largest population for whom rescission would make sense, the probability of having your

by gleb 17y ago

Then the article "lies" in the same way: "If the top 5% is the absolute largest population for whom rescission would make sense, the probability of having your policy cancelled given that you have filed a claim is fully 10% (0.5% rescission/5.0% of the population)." Let's assume his numbers are correct. Is 10% high or low? Who knows. What is the probability of the applicant having lied, given that they have filed that type of claim, and what is the probability for the rest of their customers? The whole "evil insurance companies" thing is ridiculous. Companies are amoral and profit seeking. Insurance companies just take groups (as regulated by government), provide them level of coverage (as regulated by government), figure out the actuarial risks (based on factors regulated by government), spread those risks around members of the group (with a low-risk members subsidizing the high risk at the level regulated by government) and sell insurance product designed to maximize their profit within a competitive marketplace. A similar product to what he is suggesting, that covers pre-existing conditions already exists in CA as a shall-issue product, it's called a small group coverage. It's also many times more expensive than individual insurance. Should an individual insurance product with transparent pre-existing condition coverage exist? Absolutely. It's going to be more expensive than today's individual coverage, and that's why an insurance company could not successfully sell it against existing competing products in the current individual marketplace, even if regulators allowed it to. It's up to the government to set up or to allow insurance companies to setup such a group/coverage/underwriting-criteria combination. It's also up to the government to get rid of perverse tax incentives that subsidize group policies and drive people away from individual policies. Of course, grilling insurance company executives on TV is so much more fun than actually doing work.

thras 17y ago
The whole "evil insurance companies" thing is ridiculous. Companies are amoral and profit seeking. Wrong. Industries have distinct cultures, usually formed through self-selection due to the sort of people who choose careers in them. Compare police officers and firemen, for example. Similar sorts of work, but wildly different cultures due to self-selection effects. Now, what sort of culture do insurance companies have? I think that there's good evidence that it's a sick and cancerous one. Otherwise, good point about the necessity of government intervention in this market.
- mnemonicsloth 17y ago
  Now, what sort of culture do insurance companies have? I think that there's good evidence that it's a sick and cancerous one. If you have evidence to support this claim, provide it. It might be interesting. If you don't, you're just resorting to name-calling so you can win a boring argument about politics. We don't like that sort of thing here. http://ycombinator.com/newsguidelines.html http://ycombinator.com/newsguidelines.html
  - davidw 17y ago
    > If you don't, you're just resorting to name-calling so you can win a boring argument about politics. We don't like that sort of thing here. Which is why "we" flag all of these articles:-)
  - timr 17y ago
    "If you have evidence to support this claim, provide it. It might be interesting. If you don't, you're just resorting to name-calling so you can win a boring argument about politics. We don't like that sort of thing here." I think the opinion of the parent falls under the heading of "arguments that do not require citation, because any educated citizen should be familiar with their content". Here's what I found in two seconds of Googling: http://articles.latimes.com/2006/sep/17/business/fi-revoke17 http://articles.latimes.com/2006/sep/17/business/fi-revoke17 http://select.nytimes.com/2006/09/22/opinion/22krugman.html?_r=1 http://select.nytimes.com/2006/09/22/opinion/22krugman.html?... http://www.sickofbluecross.com/consumer_stories/ http://www.sickofbluecross.com/consumer_stories/ and here's a great podcst from last weekend on insurance companies and their rescission practices that I just happened to hear while making dinner (third story in; right around the 30 minute mark): http://thislife.org/Radio_Episode.aspx?episode=386 http://thislife.org/Radio_Episode.aspx?episode=386 ...and that's just a taste of the information that's out there, available to anyone with even a passing inclination to look for it. Maybe the decisions documented in these articles don't constitute "evil", but I wouldn't characterize the them as "amoral", either. At the least, there's a strong argument to be made that the profit-seeking motive of American health insurance companies has gotten out of balance with its duty to protect the insured, and requires further regulation.
- 17y ago
greendestiny 17y ago
His numbers aren't even attempting to be correct, he's pointing out that in fact 0.5% isn't necessarily low. What it shows is there is quite an obvious strategy for insurance companies to pursue which would have a level of 0.5% rescission but completely destroy the expectation that you be covered in the event that you really needed your health insurance.

by gleb 17y ago

thras 17y ago

The whole "evil insurance companies" thing is ridiculous. Companies are amoral and profit seeking. Wrong. Industries have distinct cultures, usually formed through self-selection due to the sort of people who choose careers in them. Compare police officers and firemen, for example. Similar sorts of work, but wildly different cultures due to self-selection effects. Now, what sort of culture do insurance companies have? I think that there's good evidence that it's a sick and cancerous one. Otherwise, good point about the necessity of government intervention in this market.

mnemonicsloth 17y ago
Now, what sort of culture do insurance companies have? I think that there's good evidence that it's a sick and cancerous one. If you have evidence to support this claim, provide it. It might be interesting. If you don't, you're just resorting to name-calling so you can win a boring argument about politics. We don't like that sort of thing here. http://ycombinator.com/newsguidelines.html http://ycombinator.com/newsguidelines.html
- davidw 17y ago
  > If you don't, you're just resorting to name-calling so you can win a boring argument about politics. We don't like that sort of thing here. Which is why "we" flag all of these articles:-)
- timr 17y ago
  "If you have evidence to support this claim, provide it. It might be interesting. If you don't, you're just resorting to name-calling so you can win a boring argument about politics. We don't like that sort of thing here." I think the opinion of the parent falls under the heading of "arguments that do not require citation, because any educated citizen should be familiar with their content". Here's what I found in two seconds of Googling: http://articles.latimes.com/2006/sep/17/business/fi-revoke17 http://articles.latimes.com/2006/sep/17/business/fi-revoke17 http://select.nytimes.com/2006/09/22/opinion/22krugman.html?_r=1 http://select.nytimes.com/2006/09/22/opinion/22krugman.html?... http://www.sickofbluecross.com/consumer_stories/ http://www.sickofbluecross.com/consumer_stories/ and here's a great podcst from last weekend on insurance companies and their rescission practices that I just happened to hear while making dinner (third story in; right around the 30 minute mark): http://thislife.org/Radio_Episode.aspx?episode=386 http://thislife.org/Radio_Episode.aspx?episode=386 ...and that's just a taste of the information that's out there, available to anyone with even a passing inclination to look for it. Maybe the decisions documented in these articles don't constitute "evil", but I wouldn't characterize the them as "amoral", either. At the least, there's a strong argument to be made that the profit-seeking motive of American health insurance companies has gotten out of balance with its duty to protect the insured, and requires further regulation.
17y ago

greendestiny 17y ago

His numbers aren't even attempting to be correct, he's pointing out that in fact 0.5% isn't necessarily low. What it shows is there is quite an obvious strategy for insurance companies to pursue which would have a level of 0.5% rescission but completely destroy the expectation that you be covered in the event that you really needed your health insurance.