Re: [asa] health care

From: Bill Powers <>
Date: Thu Sep 24 2009 - 16:41:50 EDT

I would like (if this is not off topic for ASA) to address the general
question of differential insurance costs.

The very notion of universal health care tends to resist the notion of
differential health costs. This is so because it tends to result in
some people paying more for insurance than others, and, as some have
indicated, that some may even be refused insurance.

Most plans presently in Congress permit some categories for differential
health care costs (mostly age I believe).

Differential health care costs are a sensible means of keeping the costs
of health care insurance down. Indeed, sensible consumers have sought
and want to be part of pools of insured that will on average require
lower medical bills. This is just one means whereby certain lifestyles
are encouraged and others discouraged.

Universal health care requires, of course, that everyone be in the pool,
no matter their lifestyle, age, or so-called pre-existing condition.
In, and of itself, this sounds like a good thing. However, what no one
appears ready to admit is that in doing so, the health insurance costs of
everyone must increase, and this is true no matter who is running the
show. What is more, differential insurance costs cannot be used to
motivate "healthier" lifestyles. Where the government is running health
payments there may be ways for it to use its far reaching powers to
encourage certain healthier choices, e.g., as it has done in imposing
draconian taxes on tobacco, something that a private insurance company is
unable to do. Of course, these costs to the public will never show up on
the tally sheet of a government controlled health insurance.

I was listening to NPR today and they were speaking of the proposed
governmental requirement that everyone be required by force of law to have
health insurance. Apparently this has been a hot issue in states that
have attempted such a policy, one often objected to by many across party
lines, esp. the young, who are the bulk of the un/under-insured.

However, what those objectors don't get is that the reason that everyone
must be included is to keep the cost of health care insurance down.
Insurance, in order to work, requires that a vast number of those who pay
into it don't get their money's worth, in particular, this includes the
young and healthy. Of course, private insurance companies don't have the
kind of power that we've endowed our government with. So they are unable
to enforce such a "sensible" insurer's move. Imagine how a car
company would be delighted to know that everyone was required to
have a car less than five years old. Indeed, I wonder to what degree the
cost of health care insurance would decrease if only this requirement were

In order to keep rising costs down, the government will do the same thing
that health insurance carriers have tried for years to do. They will
lower the amount they are willing to pay for a given procedure and control
which procedures will be paid for. The government can however enact far
more reaching controls. They can require by force of law that the medical
provider not be permitted to pass on uninsured costs to the patient,
something that a private insurance company cannot do. They might even
enact a law prohibiting that a given procedure be performed at all. It
could happen that certain procedures are deemed by the government as too
expensive or insufficiently cost-effective. As a result many doctors
might be drawn to those patients who are willing and able to pay for such
procedures, thereby draining the doctors available for the "less
fortunate." For these reasons the government, again to control costs,
might prohibit supplemental medical insurance.

  I have long argued that we don't really need health insurance at all.
However, to do so would require significant changes in the relationships
that doctors and hospitals have with their patients, something I view as a
good thing. It all depends on what you prize. The present debate over
health insurance has, IMO, very little to do with costs and more to do
with the way we think the world should be.

Oh, well...


    On Thu, 24 Sep 2009, John Burgeson (ASA
member) wrote:

> In eight US states and Washington, D.C., insurance companies are
> legally allowed to deny health insurance coverage to victims of
> domestic abuse, treating it essentially, if not literally, as a
> pre-existing condition.
> Which is one practice of the insurance companies I hope will be stopped
> Great short clip about Health Care Reform!
> --
> Burgy
> To unsubscribe, send a message to with
> "unsubscribe asa" (no quotes) as the body of the message.

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Received on Thu Sep 24 16:43:01 2009

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