Objection! The assumption that insurance deserves high profits is easy to make but hard to justify. There is very little value-add that comes from the insurance company itself, since it's just gambling as the house; iterated over millions of customers, that stops being an assumption of risk and starts being a license to print money. (As you might surmise, I have a berserk button when it comes to people doing essentially what I do for a living, and then claiming to be geniuses worth multimillion dollar salaries.) The only two hard parts are assembling a large enough risk pool, and updating the actuarial spreadsheets with Enough Data.
The key tell is the Medical Loss Ratio provision of the ACA. This mandates that, if health costs and claims are below 80% (small group) or 85% (large group) of premium income, the balance must be refunded. I've gotten an MLR check from my insurance company every year, and so has everyone else I've ever talked to who buys their own insurance. Consistent 20% overhead+profit is pretty wild for Keepers of Spreadsheets.
As you might have guessed, this view of health insurance makes me a proponent of single payer health insurance. I prefer state-level single payer, because US states are more than large enough to constitute large-enough risk pools, and I think that making Vermont and South Carolina slug it out over whether a federal single payer insurance would cover contraception is too politically high-risk. (I'm pessimistic about the long-term survival of an effective American polity anyway, this being just a part of that.)
![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png)
timeasmymeasure
no subject
Date: 2013-08-25 10:53 pm (UTC)Objection! The assumption that insurance deserves high profits is easy to make but hard to justify. There is very little value-add that comes from the insurance company itself, since it's just gambling as the house; iterated over millions of customers, that stops being an assumption of risk and starts being a license to print money. (As you might surmise, I have a berserk button when it comes to people doing essentially what I do for a living, and then claiming to be geniuses worth multimillion dollar salaries.) The only two hard parts are assembling a large enough risk pool, and updating the actuarial spreadsheets with Enough Data.
The key tell is the Medical Loss Ratio provision of the ACA. This mandates that, if health costs and claims are below 80% (small group) or 85% (large group) of premium income, the balance must be refunded. I've gotten an MLR check from my insurance company every year, and so has everyone else I've ever talked to who buys their own insurance. Consistent 20% overhead+profit is pretty wild for Keepers of Spreadsheets.
As you might have guessed, this view of health insurance makes me a proponent of single payer health insurance. I prefer state-level single payer, because US states are more than large enough to constitute large-enough risk pools, and I think that making Vermont and South Carolina slug it out over whether a federal single payer insurance would cover contraception is too politically high-risk. (I'm pessimistic about the long-term survival of an effective American polity anyway, this being just a part of that.)