Wednesday, December 10, 2008

Not Ready for Prime Time

Depressed about the economy?

Worried about your job or how you will pay the bills?

How about a few laughs?

Patton Hyman of Barnet, VT should do stand up comedy.

In reference to Sen. Baucus' proposal for health care reform, Mr. Hyman notes the following.

His reform "will simply [love that word!] preclude insurers from discriminating against those who are sick." This is analogous to saying that property and casualty insurers should be precluded from charging higher rates or denying coverage to (i.e., discriminating against) people who store gasoline in the basement.

Mr. Hyman fails to indicate if the gas hoarder is also a smoker. That info is probably PHI (protected health information).

But he did offer this additional argument.

Properly conceived, "insurance" is a plan for spreading the cost of a known but specifically unpredictable risk. Take fire insurance as an example. I make monthly payments for fire insurance that are a small fraction of the cost of rebuilding my house. That is possible only because a pool of homeowners does likewise, and the insurer can calculate the risk of the occurrence of the casualty and spread the cost over the pool of insureds. However, if I can buy insurance for the same rate after my house has burned, then it's impossible for the premium to be spread, because everybody else can do likewise; in which case, the premiums would have to approach or equal 100% of the loss. Allowing those who are already ill to purchase health "insurance" on the same basis as the healthy is like letting someone buy fire insurance after the house has burned.

So what are you saying Mr. Hyman?

That someone diagnosed with cancer would be unwilling to pay a cost plus premium for their care?

How inconsiderate!

With Sen. Baucus's system, once everybody finds out they can wait to buy insurance until they are sick, watch what happens to the premiums

You mean, like, they might go up?

You are kidding, right?

Who knew?
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