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The US insurance system is heavily tuned to make some people pay for others. Employer sponsored insurance, together with accompanying regulations about individu

The US insurance system is heavily tuned to make some people pay for others. Employer sponsored insurance, together with accompanying regulations about individual costs, is tuned to make sure the smoker and the healthy person pay the same price. See also community rating in the private market. On top of that, the US government pays more for it's own socialized medical programs than most other nations do. And this isn't even getting into all the ways regulations micromanage doctors and other parts of the system. Not to mention micromanage financial services - India actually has innovation in that space. Any theories which claim that for-profit systems are horrible need to be tested against the Indian system. It's mostly for-profit, free market, etc - all the incorrect claims people make about the US are pretty much true there.

danielweber 12y ago
There's this story about health care that goes like this: 1. There are two kinds of health care systems in the world. 2. The first kind is private-run, profit-driven and super-expensive, the second kind is government-run and much cheaper. 3. America has the first kind. Every other country has the second kind. You can see that story being repeated all over this page.
- happyscrappy 12y ago
  You forgot to mention that that story is a fiction, albeit a popular one.
  - danielweber 12y ago
    That's true
chrisbennet 12y ago
Employer sponsored insurance, together with accompanying regulations about individual costs, is tuned to make sure the smoker and the healthy person pay the same price. That is kind of what insurance is for though - to level out the cost for everyone. It's a common misconception that smokers cost society. The truth is, smokers die earlier and cost tax payers less in insurance benefits and health care than non-smokers. [1] We should be encouraging people to smoke if we want to save money. (I'm joking!) [1] http://www.plosmedicine.org/article/info:doi/10.1371/journal.pmed.0050029 http://www.plosmedicine.org/article/info:doi/10.1371/journal...
- yummyfajitas 12y ago
  That is kind of what insurance is for though - to level out the cost for everyone. No, the point of insurance is to reduce the variance of an individual's future cost. Due to the law of large numbers, averaging across independent identically distributed people is equivalent to averaging over the future, but that's a side effect. Averaging over independent non-identically distributed people is NOT part of insurance at all - that's what I'm describing as "the socialist part". An example illustrating the difference - say you have 10 dice, and if a die rolls a 6 it costs $1,000. You also have 10 coins, and if the coin comes up heads, it costs $1,000. Insurance is when you charge the dice $166 and the coins $500. Socialism is when you charge everyone $333 - that's redistribution from the dice to the coins. The link about smoking costs is interesting, however that applies at the level of government paying for lifetime costs. Annual costs are higher. So insurance for this year should cost the smoker more than the healthy person.

danielweber 12y ago

There's this story about health care that goes like this: 1. There are two kinds of health care systems in the world. 2. The first kind is private-run, profit-driven and super-expensive, the second kind is government-run and much cheaper. 3. America has the first kind. Every other country has the second kind. You can see that story being repeated all over this page.

happyscrappy 12y ago
You forgot to mention that that story is a fiction, albeit a popular one.
- danielweber 12y ago
  That's true

chrisbennet 12y ago

Employer sponsored insurance, together with accompanying regulations about individual costs, is tuned to make sure the smoker and the healthy person pay the same price. That is kind of what insurance is for though - to level out the cost for everyone. It's a common misconception that smokers cost society. The truth is, smokers die earlier and cost tax payers less in insurance benefits and health care than non-smokers. [1] We should be encouraging people to smoke if we want to save money. (I'm joking!) [1] http://www.plosmedicine.org/article/info:doi/10.1371/journal.pmed.0050029 http://www.plosmedicine.org/article/info:doi/10.1371/journal...

yummyfajitas 12y ago
That is kind of what insurance is for though - to level out the cost for everyone. No, the point of insurance is to reduce the variance of an individual's future cost. Due to the law of large numbers, averaging across independent identically distributed people is equivalent to averaging over the future, but that's a side effect. Averaging over independent non-identically distributed people is NOT part of insurance at all - that's what I'm describing as "the socialist part". An example illustrating the difference - say you have 10 dice, and if a die rolls a 6 it costs $1,000. You also have 10 coins, and if the coin comes up heads, it costs $1,000. Insurance is when you charge the dice $166 and the coins $500. Socialism is when you charge everyone $333 - that's redistribution from the dice to the coins. The link about smoking costs is interesting, however that applies at the level of government paying for lifetime costs. Annual costs are higher. So insurance for this year should cost the smoker more than the healthy person.