Quote:
Originally Posted by THAY3R
You're kind of changing the definition of insurance. Insurance should inherently be -EV but still correct in most cases because of the mitigation of risk. You're kind of arguing that earthquake insurance doesn't work if Floridians won't pay for it to subsidize California
More what I'm arguing is that everyone who has earthquake insurance but doesn't experience an earthquake subsidizes those who do experience earthquakes. The difference is that basically no one in any given location has any better or worse idea whether they'll have an earthquake related claims. So earthquake insurance truly is -EV for everyone.
In health insurance it's obviously much more complicated. People have a good idea whether they'll have claims, so they can know ahead of time whether insurance is +EV or -EV for them. Additionally, people's behavior impacts their health insurance claims (e.g. deciding to go to the doctor, going to an ER when urgent care will do, getting fat, smoking), so adverse selection is a huge problem in health insurance the way it isn't for some other types of insurance.
Quote:
Originally Posted by kkcountry
So is this where corporate sponsored wellness programs start to jam things up? Because if a fat or an old doesn't hit the mark, he loses his coverage and would be practically uninsurable as an individual?
I've never heard of a program where someone fails and gets kicked off their insurance. That's brutal. Of course (thanks obama) that would be less of a thing now since at least the person would definitely be able to get coverage on the exchange.
There's no such thing as "uninsurable" when it comes to health insurance now. One of the pillars of the ACA was guaranteed issue - no one can be denied coverage, and rating restrictions (premiums can only vary based on age, location, smoking status, and how many people are covered). The other pillar is the individual mandate.