Ay, there’s the rub

Expensive? Beyond our needs? Half the price?

When you buy insurance, any insurance you are attempting to reduce your financial risk. While that financial risk can be estimated, such as the cost of replacing your car or even your house, the occurrence risk is less predictable even though actuaries try.

When it comes to health insurance, predictability is even more difficult, especially as the covered group declines in size. In addition, the liability for health care has virtually no limit and can continue for years.

When people say the coverage is beyond their needs, they are saying we are healthy and have little or no expenses … at the moment. They want less coverage and lower premiums because they believe insurance will not be used.

On the other hand, the sick, those with chronic conditions, want more coverage and lower out-of-pocket costs. They believe what they receive in benefits will exceed the higher premium costs.

When Dan Plato left his job to become self-employed as a consultant, he discovered that an A.C.A. policy for 2018 would cost his family around $1,300 a month. “It was very expensive and beyond our needs,” he said. Membership in Liberty Healthshare, a ministry established by Mennonites in Canton, Ohio, was less than half the price, according to Mr. Plato. New York Times 1-2-20

Think about those two scenarios. The less well group cannot survive because eventually the premiums must rise to exceed the actual health care expenses. In other words, it’s no longer insurance.

What happens when members of the healthy group are no longer healthy? They will seek to enroll in the coverage that now “meets their needs,” and in doing so drive premiums even higher.

The idea of choice in health care coverage, in allowing individuals to seek the best for themselves and against a group cannot be sustained.


  1. I think this topic deserves another blog entry, or two, or more.
    You conclude the current system which allows choice cannot be sustained. What are the limits, once reached, which you believe would collapse the system?

    In nine years, all baby boomers still alive will have reached 65. Our current birth rate is at an historic low. Yes, “adjustments” must be made!
    But when do you think they will be made and what do you think they will look like.


    1. With or without choice, the cost will be the same. It’s just a matter of shifting costs from here to there, from one group of Americans to another. It’s a matter of fairness. If a person can reject coverage until they need it, those already insured pick up the cost. We need some form of universal coverage. Not M4A and not necessarily all government run, but everyone should share the burden in some manner and not be able to shift risk to others. Health care spending is highly concentrated in relatively few people, that’s just a fact.


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