7 ms·

The next step is "health insurance" (as we call it in the US, though it's in actuality no such thing) carriers mining your credit card and loyalty program data

by rosser 12y ago

The next step is "health insurance" (as we call it in the US, though it's in actuality no such thing) carriers mining your credit card and loyalty program data and hiking your rates if their model predicts you're going to need more or more expensive care. The problem is that unhealthy lifestyles (drinking, smoking, fast food, &c) are disproportionately found among the lower socioeconomic strata, creating yet another penalty for being poor.

blahedo 12y ago
Happily, Obamacare limits the extent to which they can do that.
- ISL 12y ago
  For now. The mandated electronic medical records from the ARRA and ACA will make it easier for entities, government or private, to do so in the future. A single-payer system would have similar incentives (in the form of cost reduction) to do the same.
- Shivetya 12y ago
  there should be no limits on smokers. There is no possible health benefit with smoking and as such penalizing them might get them quit. Many self insured companies already charge extra, 600 a year where I am. However for the money most make that isn't diddly, at least they don't think so
  - throwaway2048 12y ago
    moralizers like yourself are why people should be very very afraid of data collection like this.
  - chenelson 12y ago
    Well, margin is a difficult concept to grep. Vanderbilt University economist Kip Viscusi claims a net cost savings of 32 cents per pack sold [1]. It seems we're all going to die, and Alzheimer's isn't part of the quick and easy way out of healthcare cost. And at the ripe age of 125 or so, 100% suffer cancer. 1. http://usatoday30.usatoday.com/news/health/2009-04-08-fda-tobacco-costs_N.htm http://usatoday30.usatoday.com/news/health/2009-04-08-fda-to...
    - mikeash 12y ago
      Smoking could save money for society but it probably doesn't save money for individual insurers, who are much more worried about the shorter term. The private insurance you have when you're 30 isn't going to be paying for your nursing-home care when you're 90, but they are likely to end up paying for various smoking-related illnesses that kill you sooner.
      - chenelson 12y ago
        We don't really have Health Insurance companies. Insurance is about risk management, and we have mandated health coverage. But, to your point, this is why real insurance companies manage their portfolios, aggregate. If they're losing money, it's not the responsibility of society to save them.
  - ridgeguy 12y ago
    "no possible health benefit with smoking"...as usual, it's more complicated. See, for example, http://aje.oxfordjournals.org/content/155/8/732.full http://aje.oxfordjournals.org/content/155/8/732.full for the negative correlation between smoking and Parkinson's disease, and http://ajcn.nutrition.org/content/87/4/801.full http://ajcn.nutrition.org/content/87/4/801.full for some insights into the negative correlation between smoking and obesity. Not to say that smoking is a good idea, it's not (actuarial data are clear on that), but your view of its consequences is inaccurate.
    - rosser 12y ago
      You're not wrong that there's a negative correlation between smoking and obesity or Parkinson's, but that is not a reason to take up smoking. You're far more likely to die of cancer or heart disease as a smoker than you are not to die from Parkinson's because you smoked.
      - lilsunnybee 12y ago
        Americans are pretty likely to die from heart disease anyways, smoker or non-.
CamperBob2 12y ago
Right, the only question is who gets to pay that penalty. Why not the people responsible for incurring it?
- rosser 12y ago
  In the case of poor diets, it's often enough a matter of what they can afford. So, yes. Let's impose a financial penalty on people who are eating poorly because they can't afford to eat well. That makes perfect sense. That said, I'm not opposed to smokers paying higher premiums — but that practice already exists, based on policyholder disclosure, or rescission in the event of fraud. (I say that as a former smoker, who did disclose my habit, and paid a substantially higher premium because of it.) We don't need carriers trolling through peoples' transaction history to dredge up every possible excuse for hiking premiums, because that's exactly what they'll do.
  - eru 12y ago
    You can eat well for cheap. But it requires discipline. And that's what lot of poor people lack. (It's a survivorship bias: discipline helps your chances of getting out of poverty.)
    - mreiland 12y ago
      You cannot consistently eat well for cheap. Yes, it's true that sometimes you can find healthy stuff for relatively cheap. It's also true that you cannot do it consistently, in order to "eat cheap" in a consistent manner, it means constantly hunting for those deals, which implies trading your time for money. This is something the poor do a lot of, sitting at a laundromat instead of just throwing clothes in a washer, for example. And I don't want to hear about eating some form of beans 5 days/week, eating healthy implies variety. It can occassionally be done as cheaply as eating unhealthily, but not consistently over time. Your food bill will go up.
      - eru 12y ago
        No need for deals. Just stick to the basics, and avoid sugar and other crap. > And I don't want to hear about eating some form of beans 5 days/week, eating healthy implies variety. Vegetables can be pretty cheap, if you stick to what's in season. Beans are a good start, add lentils, potatoes, carrots, etc. Offal makes for cheap protein (but is not to everyone's taste).
Scoundreller 12y ago
The funny thing is that the insurance industry is obsoleting itself. If they perfectly assess risk, your annual premium will just be your annual cost plus all of the administrative costs of insurance, so just self-insure. We're getting closer and closer to that, further eliminating any value that anyone gets from insurance.
- chenelson 12y ago
  Insurance is a mode of risk management. If we all have mandated coverage, then all risk is assumed, and the term "insurance" is meaningless.
  - omal 12y ago
    Actually, mandated insurance is perfectly in-line with what insurance is for. For n people, you now own a 1/n share of n risks that are not perfectly correlated with each other. Since people are assumed to be risk-averse and due to Jensen's inequality, your expected utility from paying your 1/n share is higher than your expected utility from taking a chance and either 1) paying nothing if you don't experience the adverse event, or 2) incurring the full cost of the adverse event. I think what you're trying to say is that the aggregate risk remains the same under mandatory coverage, put that's going to be true no matter what and the effects of this risk can be optimally spread through insurance. As an example, say $180 billion dollars worth of damage is done to 1 million homes in the US through natural disasters every year. With 300 million people in the US, mandated insurance would have everyone pay $600 a year to cover these damages. No insurance would mean you paid nothing unless your house was affected, at which point you lost on average $180,000. Insurance exists to pool the risks of these life-destroying events. Insurance definitely isn't going away, in fact our capability to insure against a wide variety of events is in its infancy. The insurance market will only get more and more sophisticated. Hank Greenberg has some interesting thoughts on the direction of the industry.
    - chenelson 12y ago
      Perfectly. Wow. You've confused a single-payer system with mandated-coverage for-profit insurance companies...that will somehow be forced by regulation to "optimize"...cost? Yeah. What's the CEO of UnitedHealthcare's nut, again? Let's talk outcomes and efficiency, and not pretend charging doctors $39 to file "insurance" paperwork is anywhere close to optimal. And, yes, aggregate risk for people will not change, as we, unlike our tools (e.g. a house), are only at equilibrium when we are dead.
Houshalter 12y ago
On the other hand you could get cheaper insurance by paying in cash or being healthier. This is the point of insurance, to estimate your risk as accurately as possible and charge based on that.
- rosser 12y ago
  Again, we don't have health "insurance". Actual insurance, as the term is used everywhere but in the American health care system wouldn't cover routine care like visits to your kid's pediatrician, but would cover major care such as surgeries — just like your car insurance doesn't cover oil changes, but does cover fender benders.
  - judk 12y ago
    Auto and home insurers in fact do pay customers for risk-mitigation actions like driver training and alarm systems, just as health insurers pay for preventive medicine.
    - rosser 12y ago
      They don't pay you for those things, and nor do they pay for them. They reduce your premiums if you have them. That's perhaps a subtle distinction, but it's a critical one. If you're suggesting that an annual physical exam is the risk mitigation equivalent of a car alarm, then GEICO should have eaten the extra cost for purchasing a car with one installed instead of charging a lower premium because you have one.
  - arrrg 12y ago
    Huh? My (mandatory and public) health insurance in Germany does pay for that. For some short time there was a €10 co-pay for routine checks (obviously not covering the actual cost of the visit) but even that was abolished some time ago. I mean, insurance doesn’t cover everything, obviously, but that mostly applies to nice to have things or aesthetic things that aren’t really necessary (e.g. root canal treatment for wisdom teeth is not covered – pulling wisdom teeth if the caries is causing problems that can’t be solved with fillings anymore is, glasses are not covered, etc.).
hellodevnull 12y ago
The penalty is for being unhealthy, not poor. There are poor people that are healthy, just because a lot aren't, do you expect insurance companies to give them special treatment?
- TazeTSchnitzel 12y ago
  So? It still disproportionately affects the poor.
  - hellodevnull 12y ago
    So? Should we give criminals an easier time because the majority are from poor backgrounds? There will always be poor people and there are always things you can do to make their lives better, complaining about insurance companies isn't one of them. This is coming from somebody who was raised in a very poor family so it's got nothing to do with not caring about poverty. It's just these sort of liberal ideas you could hear at an occupy protest show zero understanding of economics and are basically just bitching about companies.
    - TazeTSchnitzel 12y ago
      Are they "bitching about companies"? Nobody ever said it was their fault.

by rosser 12y ago

blahedo 12y ago

Happily, Obamacare limits the extent to which they can do that.

ISL 12y ago
For now. The mandated electronic medical records from the ARRA and ACA will make it easier for entities, government or private, to do so in the future. A single-payer system would have similar incentives (in the form of cost reduction) to do the same.
Shivetya 12y ago
there should be no limits on smokers. There is no possible health benefit with smoking and as such penalizing them might get them quit. Many self insured companies already charge extra, 600 a year where I am. However for the money most make that isn't diddly, at least they don't think so
- throwaway2048 12y ago
  moralizers like yourself are why people should be very very afraid of data collection like this.
- chenelson 12y ago
  Well, margin is a difficult concept to grep. Vanderbilt University economist Kip Viscusi claims a net cost savings of 32 cents per pack sold [1]. It seems we're all going to die, and Alzheimer's isn't part of the quick and easy way out of healthcare cost. And at the ripe age of 125 or so, 100% suffer cancer. 1. http://usatoday30.usatoday.com/news/health/2009-04-08-fda-tobacco-costs_N.htm http://usatoday30.usatoday.com/news/health/2009-04-08-fda-to...
  - mikeash 12y ago
    Smoking could save money for society but it probably doesn't save money for individual insurers, who are much more worried about the shorter term. The private insurance you have when you're 30 isn't going to be paying for your nursing-home care when you're 90, but they are likely to end up paying for various smoking-related illnesses that kill you sooner.
    - chenelson 12y ago
      We don't really have Health Insurance companies. Insurance is about risk management, and we have mandated health coverage. But, to your point, this is why real insurance companies manage their portfolios, aggregate. If they're losing money, it's not the responsibility of society to save them.
- ridgeguy 12y ago
  "no possible health benefit with smoking"...as usual, it's more complicated. See, for example, http://aje.oxfordjournals.org/content/155/8/732.full http://aje.oxfordjournals.org/content/155/8/732.full for the negative correlation between smoking and Parkinson's disease, and http://ajcn.nutrition.org/content/87/4/801.full http://ajcn.nutrition.org/content/87/4/801.full for some insights into the negative correlation between smoking and obesity. Not to say that smoking is a good idea, it's not (actuarial data are clear on that), but your view of its consequences is inaccurate.
  - rosser 12y ago
    You're not wrong that there's a negative correlation between smoking and obesity or Parkinson's, but that is not a reason to take up smoking. You're far more likely to die of cancer or heart disease as a smoker than you are not to die from Parkinson's because you smoked.
    - lilsunnybee 12y ago
      Americans are pretty likely to die from heart disease anyways, smoker or non-.

CamperBob2 12y ago

Right, the only question is who gets to pay that penalty. Why not the people responsible for incurring it?

rosser 12y ago
In the case of poor diets, it's often enough a matter of what they can afford. So, yes. Let's impose a financial penalty on people who are eating poorly because they can't afford to eat well. That makes perfect sense. That said, I'm not opposed to smokers paying higher premiums — but that practice already exists, based on policyholder disclosure, or rescission in the event of fraud. (I say that as a former smoker, who did disclose my habit, and paid a substantially higher premium because of it.) We don't need carriers trolling through peoples' transaction history to dredge up every possible excuse for hiking premiums, because that's exactly what they'll do.
- eru 12y ago
  You can eat well for cheap. But it requires discipline. And that's what lot of poor people lack. (It's a survivorship bias: discipline helps your chances of getting out of poverty.)
  - mreiland 12y ago
    You cannot consistently eat well for cheap. Yes, it's true that sometimes you can find healthy stuff for relatively cheap. It's also true that you cannot do it consistently, in order to "eat cheap" in a consistent manner, it means constantly hunting for those deals, which implies trading your time for money. This is something the poor do a lot of, sitting at a laundromat instead of just throwing clothes in a washer, for example. And I don't want to hear about eating some form of beans 5 days/week, eating healthy implies variety. It can occassionally be done as cheaply as eating unhealthily, but not consistently over time. Your food bill will go up.
    - eru 12y ago
      No need for deals. Just stick to the basics, and avoid sugar and other crap. > And I don't want to hear about eating some form of beans 5 days/week, eating healthy implies variety. Vegetables can be pretty cheap, if you stick to what's in season. Beans are a good start, add lentils, potatoes, carrots, etc. Offal makes for cheap protein (but is not to everyone's taste).

Scoundreller 12y ago

The funny thing is that the insurance industry is obsoleting itself. If they perfectly assess risk, your annual premium will just be your annual cost plus all of the administrative costs of insurance, so just self-insure. We're getting closer and closer to that, further eliminating any value that anyone gets from insurance.

chenelson 12y ago
Insurance is a mode of risk management. If we all have mandated coverage, then all risk is assumed, and the term "insurance" is meaningless.
- omal 12y ago
  Actually, mandated insurance is perfectly in-line with what insurance is for. For n people, you now own a 1/n share of n risks that are not perfectly correlated with each other. Since people are assumed to be risk-averse and due to Jensen's inequality, your expected utility from paying your 1/n share is higher than your expected utility from taking a chance and either 1) paying nothing if you don't experience the adverse event, or 2) incurring the full cost of the adverse event. I think what you're trying to say is that the aggregate risk remains the same under mandatory coverage, put that's going to be true no matter what and the effects of this risk can be optimally spread through insurance. As an example, say $180 billion dollars worth of damage is done to 1 million homes in the US through natural disasters every year. With 300 million people in the US, mandated insurance would have everyone pay $600 a year to cover these damages. No insurance would mean you paid nothing unless your house was affected, at which point you lost on average $180,000. Insurance exists to pool the risks of these life-destroying events. Insurance definitely isn't going away, in fact our capability to insure against a wide variety of events is in its infancy. The insurance market will only get more and more sophisticated. Hank Greenberg has some interesting thoughts on the direction of the industry.
  - chenelson 12y ago
    Perfectly. Wow. You've confused a single-payer system with mandated-coverage for-profit insurance companies...that will somehow be forced by regulation to "optimize"...cost? Yeah. What's the CEO of UnitedHealthcare's nut, again? Let's talk outcomes and efficiency, and not pretend charging doctors $39 to file "insurance" paperwork is anywhere close to optimal. And, yes, aggregate risk for people will not change, as we, unlike our tools (e.g. a house), are only at equilibrium when we are dead.

Houshalter 12y ago

On the other hand you could get cheaper insurance by paying in cash or being healthier. This is the point of insurance, to estimate your risk as accurately as possible and charge based on that.

rosser 12y ago
Again, we don't have health "insurance". Actual insurance, as the term is used everywhere but in the American health care system wouldn't cover routine care like visits to your kid's pediatrician, but would cover major care such as surgeries — just like your car insurance doesn't cover oil changes, but does cover fender benders.
- judk 12y ago
  Auto and home insurers in fact do pay customers for risk-mitigation actions like driver training and alarm systems, just as health insurers pay for preventive medicine.
  - rosser 12y ago
    They don't pay you for those things, and nor do they pay for them. They reduce your premiums if you have them. That's perhaps a subtle distinction, but it's a critical one. If you're suggesting that an annual physical exam is the risk mitigation equivalent of a car alarm, then GEICO should have eaten the extra cost for purchasing a car with one installed instead of charging a lower premium because you have one.
- arrrg 12y ago
  Huh? My (mandatory and public) health insurance in Germany does pay for that. For some short time there was a €10 co-pay for routine checks (obviously not covering the actual cost of the visit) but even that was abolished some time ago. I mean, insurance doesn’t cover everything, obviously, but that mostly applies to nice to have things or aesthetic things that aren’t really necessary (e.g. root canal treatment for wisdom teeth is not covered – pulling wisdom teeth if the caries is causing problems that can’t be solved with fillings anymore is, glasses are not covered, etc.).

hellodevnull 12y ago

The penalty is for being unhealthy, not poor. There are poor people that are healthy, just because a lot aren't, do you expect insurance companies to give them special treatment?

TazeTSchnitzel 12y ago
So? It still disproportionately affects the poor.
- hellodevnull 12y ago
  So? Should we give criminals an easier time because the majority are from poor backgrounds? There will always be poor people and there are always things you can do to make their lives better, complaining about insurance companies isn't one of them. This is coming from somebody who was raised in a very poor family so it's got nothing to do with not caring about poverty. It's just these sort of liberal ideas you could hear at an occupy protest show zero understanding of economics and are basically just bitching about companies.
  - TazeTSchnitzel 12y ago
    Are they "bitching about companies"? Nobody ever said it was their fault.