Sherry Chandler » The essential nature of insurance companies
The essential nature of insurance companies
from Kevin Drum:
Of course insurance companies are interested in discriminating based on a genetic markers. That’s what insurance companies do: they evaluate risks and then offer pricing and coverage that are appropriate and profitable based on those risks. If they don’t do that, they aren’t being insurance companies.
It’s worth saying this over and over: insurance companies don’t discriminate because they’re evil. They do it because it’s what insurance companies do. It’s a core part of their business, and if they don’t do it they’ll go belly up.
This is the biggest reason for wanting to get private insurance companies (mostly) out of the healthcare business. If it were just a matter of their being corrupt or evil, that actually wouldn’t be so bad. We could figure out ways to regulate them into good behavior. But it’s harder than that. The kind of behavior that most of us want — comparable coverage for everyone under nondiscriminatory pricing rules — is flatly not something an insurance company can offer.
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1 Comment
1. Tommy replies at 25th February 2008, 9:11 am :
My concern about health care mandates is that we haven’t found anyone who’s willing to cover Isabel. If the health insurance companies are obliged to cover Isabel by a mandate, who’s to say they can’t price themselves over our heads? All the talk I’ve heard so far is about punishing people — the consumers — who don’t have coverage. I want to hear what they plan to do to cover the pricing-out-of-the-market loophole.
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