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New Video: Insurance Company Rules |
by Jason Rosenbaum :: Filed Under U.S. Domestic Issues :: July 19th, 2008 @ 3:19 pm EST
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When insurance companies get to make up the rules governing who gets coverage and who doesn’t, the concept of fairness goes out the window. If only regular people could use those “insurance company rules” in real life, right?
We’ve put together a video on this concept. It’s funny (we think!), but the issues we’re talking about are deadly serious. Check it out:
The analogy is apt. Insurance companies make up the rules as they go along, maximizing their profit along the way. As demonstrated in Melody Townsel’s case, this system defies logic and leads to chaos, with hard working people left behind. This system is broken - it needs to change.
(also posted at the NOW! blog)
Too long.
Market-valued insurance makes sense when risk is voluntary. If you build a house in a flood plain, you should pay much more for flood insurance than if you build it somewhere else. There have been some attempts at health insurance based on voluntary control of risk, for example special policies for non-smokers, but mostly health-insurance screening is based on factors beyond the control of the insurees (i.e. they just reject sick people), and the practice is to refuse payment for preventive care.
In flood insurance, you pay the insurance companies now, and they pay off only in the future with some low probability. Preventive care would require expenditure by them now, for presumed profit in the future in the form of lower rates of payout. The lung cancer you get 20 years from now does not mean much to executives who expect to make millions from profits in the next few years, take their golden parachute and move on to another job.
Plus, you might well be with a different insurer by that point.
- not if it’s socialized - The current game of arbitrage leads to shitting on poor people at high risk through multi-national loopholes. A socialized program would corral the risk/reward amongst the populace and get rid of the competition involved in consumer acquisition. GEICO spent > $500M on cavemen and talking gecko’s last year.