Medical Care Pre-Fee Versus True Insurance coverage
William M. Briggs thinks that “true insurance coverage” is the higher thought. He begins with this rationalization:
Well being Insurance coverage needs to be, however isn’t, a wager you make that you just hope you lose.
It has turn into as a substitute an inefficient type of socialized medication, rising prices. Right here’s how.
Right here’s what insurance coverage needs to be. You wager with an Insurer that you just get most cancers, say. For those who get it, the Insurer pays prices of care X. For those who lose and stay most cancers free, you pay Y. You re-bet each month (or no matter). You pay Y each time you lose. The X and Y are negotiated between you and the Insurer, and the danger of most cancers is set by you and individually by the Insurer. That’s the naked bones of true Insurance coverage. Or, certainly, of any wager.
You may as well group ailments, say most cancers and CHF. You then pay Y_1 + Y_2 (say) and the prices are X_1 + X_2. The result’s a contract wager simply the identical. However with increased stakes for each.
Suppose you already have most cancers and wager the Insurer you received’t get it. You instantly win the wager! The Insurer should pay X.
How a lot ought to the Insurer cost you for this sure-thing wager? X. In spite of everything, your “pre-existing situation” is a sure-thing wager the Insurer is sure to lose. There is no such thing as a sense in you making the wager.
Except a Ruler steps in and says “Insurer, you should take this wager!” Which, in fact, occurs. Then the Insurer should unfold the prices of X to others.
If the Insurer doesn’t unfold the prices, he has certain loss (assuming calibrate bets, about which extra later). Which suggests in the event you wager you could have most cancers whenever you do, when your neighbor makes a wager for most cancers when he doesn’t have it, he should pay Y+S, the place S represents the unfold. The extra individuals within the system, the smaller S is.
Voilà! With protection mandates Insurance coverage robotically turns into socialized medication. Very inefficient, too, as a result of not solely are we paying a non-public entity to handle this, and take his earnings, we pay bureaucrats to observe all of it. Prices should enhance. Well being care received’t get higher, however prices should rise.
It’s worse than all this, too!
RTWT. I focus on the professionals and cons of the “true insurance coverage” thought in my guide beneath. Dramatic value reductions executed at the moment.
Steve Parker, M.D.
