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The private insurance industry, as currently constituted, would collapse if the government allowed real competition. The companies offer no real value and so in

by brfox 17y ago

michael_dorfman 17y ago
The private insurance industry, as currently constituted, would collapse if the government allowed real competition. The companies offer no real value and so instead must create a regulatory system that virtually mandates their existence and will soon actually do so. This is an attractive sentiment, but, unfortunately, false. I used to work for a private health insurer a couple of decades ago, and they absolutely do provide "real value", in two different forms. 1) They offer an opportunity to share risk among subscribers. If every small business (or individual) were responsible directly for their own health care costs, a catastrophic illness in the pool would most likely cause bankruptcy. By spreading the expenses (in the form of premiums) across a large pool of people (both healthy and sick), costs are levelled to everyone's advantage. 2) Even for groups with large enough risk pools to manage their own risk (i.e., companies of over 500 employees, generally speaking), health insurers provide a useful services in terms of negotiating discounts with hospitals, and in the formulation (and execution) of rules (such as which services are covered, what the co-payments should be, etc.). Large businesses often would self-insure (i.e., manage their own risk) but pay us a service fee to administer their plan.
- timmaah 17y ago
  1. Kind of funny..Their opportunity to share the risk is BS. I don't have to pool my car insurance with my co-workers. Health ins should not be tied to a place of employment. There should be no "pool" inside of an insurer. Every customer of the insurer should be in the same "pool"
  - michael_dorfman 17y ago
    You're missing my point: it doesn't matter whether you have one pool or many-- pooling people together is what shares the risk, and in order to do that, you need a large number of people. That's a service that health insurers provide. The fact that health insurance in the US is tied to place of employment is a weird historical artifact, but the value the insurers provide woudl be the same if it were not the case. You may not pool your car insurance with your co-workers, but you are pooling it with somebody-- in this case, the other people who purchase insurance from the same auto insurance company as you.
    - timmaah 17y ago
      I got your point, your not getting mine. My point was that I, if I am self employed, get the same rates and benefits on my car ins. as someone that works at IBM. Health ins should be the same way. One pool per insurer. That said, it is not going down that way and that is not even being discussed. Dem leaders wussed out, any PO is a start though

by brfox 17y ago

michael_dorfman 17y ago

The private insurance industry, as currently constituted, would collapse if the government allowed real competition. The companies offer no real value and so instead must create a regulatory system that virtually mandates their existence and will soon actually do so. This is an attractive sentiment, but, unfortunately, false. I used to work for a private health insurer a couple of decades ago, and they absolutely do provide "real value", in two different forms. 1) They offer an opportunity to share risk among subscribers. If every small business (or individual) were responsible directly for their own health care costs, a catastrophic illness in the pool would most likely cause bankruptcy. By spreading the expenses (in the form of premiums) across a large pool of people (both healthy and sick), costs are levelled to everyone's advantage. 2) Even for groups with large enough risk pools to manage their own risk (i.e., companies of over 500 employees, generally speaking), health insurers provide a useful services in terms of negotiating discounts with hospitals, and in the formulation (and execution) of rules (such as which services are covered, what the co-payments should be, etc.). Large businesses often would self-insure (i.e., manage their own risk) but pay us a service fee to administer their plan.

timmaah 17y ago
1. Kind of funny..Their opportunity to share the risk is BS. I don't have to pool my car insurance with my co-workers. Health ins should not be tied to a place of employment. There should be no "pool" inside of an insurer. Every customer of the insurer should be in the same "pool"
- michael_dorfman 17y ago
  You're missing my point: it doesn't matter whether you have one pool or many-- pooling people together is what shares the risk, and in order to do that, you need a large number of people. That's a service that health insurers provide. The fact that health insurance in the US is tied to place of employment is a weird historical artifact, but the value the insurers provide woudl be the same if it were not the case. You may not pool your car insurance with your co-workers, but you are pooling it with somebody-- in this case, the other people who purchase insurance from the same auto insurance company as you.
  - timmaah 17y ago
    I got your point, your not getting mine. My point was that I, if I am self employed, get the same rates and benefits on my car ins. as someone that works at IBM. Health ins should be the same way. One pool per insurer. That said, it is not going down that way and that is not even being discussed. Dem leaders wussed out, any PO is a start though