US health care question

[Iormlund]

It would be prohibitively expensive. I have MS and the cost for my two medications is about $4,000 per month. Based on income and need I qualified for Medicare which pays for my prescriptions and other health costs.

Hey, this is America. Aren't we supposed to be letting you rot in the streets or something? We have a strawman to live up to after all. :p

He would if the proposed reform is enacted. He is on Medicare.

[DGuller]

Now, what kind of insurer you think would aim for me?

The one that sells annuities.

[Iormlund]

I'm not likely to die anytime soon.
It's a bitch of a disease, but the mortality rate is insignificant.

[Admiral Yi]

That's fine, except no sane insurer would offer that kind of policy. It's just not financially viable to aim for the sick or elderly. Let me put my case as an example: in the last two years I've been a total of 2 months at the hospital. I've had 4 scans, 4 barium swallow tests, innumerable blood tests, visited my specialist around 30 times, had half a meter worth of intestine taken out. Been unable to work for 7 or so months. I've got 50% chance of needing further surgery. Unless a cure is found I'll be on drugs for the rest o my life - and while those I've taken so far are relatively cheap that will surely change once better ones are discovered.

Now, what kind of insurer you think would aim for me?

He's not talking about your situation.  He's talking about buying insurance for his employees, and the government requiring that any insurance he be offered include some esoteric stuff.  Now I don't know specifically what esoteric stuff he's talking about, but there are issue ads running on TV here that ask viewers to contact their congressman and ask him to "end autism discrimination."  Who knows what that means.  Babysitting for life?  I also have a vague recollection of a certain number of pap smears or mammograms being made mandatory back in the 80s.

[MadImmortalMan]

Now, what kind of insurer you think would aim for me?

The one that sells annuities.

Okay, so here's a question. What kind of incentive could be provided that would make insurers want to take on high-risk customers then? Tax breaks? Outright subsidy? Liability limitation from externality or malpractice damages? Maybe the latter combined with tax writeoffs for covering the treatments. That would make a fairly predictable expense model for the insurer maybe, but I don't see how it could get the premiums down for the patients.

[Admiral Yi]

Okay, so here's a question. What kind of incentive could be provided that would make insurers want to take on high-risk customers then? Tax breaks? Outright subsidy? Liability limitation from externality or malpractice damages? Maybe the latter combined with tax writeoffs for covering the treatments. That would make a fairly predictable expense model for the insurer maybe, but I don't see how it could get the premiums down for the patients.

Are you referring to Iormlund?  He's not high risk, he's high cost.

[garbon]

I personally couldn't get individual insurance when I was out of college and wasn't yet working.  The prices were just completely insane, and would be appropriate only if I were a diabetic dying of cancer.  I think I detailed my frustrations on the old Languish back then.  I lived in New York at the time, though, which is one of the most dysfunctional states when it comes to any kind of insurance.

I'm glad you got a job, hippie.

[DGuller]

Okay, so here's a question. What kind of incentive could be provided that would make insurers want to take on high-risk customers then? Tax breaks? Outright subsidy? Liability limitation from externality or malpractice damages? Maybe the latter combined with tax writeoffs for covering the treatments. That would make a fairly predictable expense model for the insurer maybe, but I don't see how it could get the premiums down for the patients.

The only incentive would be the law barring denial of coverage to the high-risk customers.  As far as insurance companies would be concerned, there would be no high-risk or low-risk customers, just like there are no black or white customers.

[DGuller]

Okay, so here's a question. What kind of incentive could be provided that would make insurers want to take on high-risk customers then? Tax breaks? Outright subsidy? Liability limitation from externality or malpractice damages? Maybe the latter combined with tax writeoffs for covering the treatments. That would make a fairly predictable expense model for the insurer maybe, but I don't see how it could get the premiums down for the patients.

Are you referring to Iormlund?  He's not high risk, he's high cost.

Same thing.  High risk means high expected costs.

[Admiral Yi]

Same thing.  High risk means high expected costs.

Ah.  What word does the industry use to capture the concept of uncertainty?  Something nutty like: uncertainty?

[Admiral Yi]

Or what does the industry call someone who is likely to have high medical bills in the future but does not now?

[Iormlund]

He's not talking about your situation.  He's talking about buying insurance for his employees, and the government requiring that any insurance he be offered include some esoteric stuff.  Now I don't know specifically what esoteric stuff he's talking about, but there are issue ads running on TV here that ask viewers to contact their congressman and ask him to "end autism discrimination."  Who knows what that means.  Babysitting for life?  I also have a vague recollection of a certain number of pap smears or mammograms being made mandatory back in the 80s.

No, he's asking for no mandatory coverage at all. Which means insurers would cover the most basic stuff and leave people like me or Citizen K in the cold. Not to mention the elderly.

The only workable insurance demands we pool everyone in a single pot. Period. Anything else ends in the system you have in place now, where either you end up paying for sick people anyway through Medicare and ER bills or like this fellow proposes with his "reform Medicare" point, you let them die, go bankrupt or steal the money they need to stay alive.
An advantage of universal mandatory coverage is a lot of problems can be prevented or ameliorated if discovered early - leading to lesser costs in long term or ER care if everyone has cheap access to a doctor.

[DGuller]

Same thing.  High risk means high expected costs.

Ah.  What word does the industry use to capture the concept of uncertainty?  Something nutty like: uncertainty?

It's more confusing than it has to be.  Risk is actually the right word to use, except that in general "high risk" is synonymous to someone who's expensive to insure regardless of their variance in costs.  I personally use "volatile" to describe the concept you're talking about without confusion.  It's not an important concept in lines of insurance where there are many policyholders, and frequency of claims is high, because all those volatilities on an individual level get evened out.

[Admiral Yi]

No, he's asking for no mandatory coverage at all.

No, he's not.  You're misreading.  We currently have 40 million uninsured so we obviously don't have mandatory coverage.  You can't ask to eliminate something that doesn't exist.

[DGuller]

Or what does the industry call someone who is likely to have high medical bills in the future but does not now?

I guess now is a good time to say that I'm not a health actuary.  I don't have that situation in my line of insurance (property insurance).  In fact, situations like this is why health insurance is special.  Real insurance deals with events that come entirely by chance, and are therefore unpredictable on an individual level, which isn't the case in the situation your describe.  That's one of the many reasons health insurance doesn't work well in free market.