More On The Moderate Mark Up
Posted by Chris Martin at 9/6/2009 8:58 AM 
Categories: Health policy, Health Insurance, biPartisanship
Tags: Stupid bipartisan tricks
Categories: Health policy, Health Insurance, biPartisanship
Tags: Stupid bipartisan tricks
Wonks Anonymous was tight for time when he wrote yesterday on the grand bipartisan health bill coming from the Senate so here is a more considered analysis of the logic of the bill:
Universal coverage is good thing because that way everyone helps to pay for health care. Part of our current problem is that people who are healthy don't buy health insurance until they get sick or decide to have kids. Medical expenses of sick people and people who are having kids are higher than medical expenses of young healthy people. Therefore the premiums that people pay for insurance are higher than they might be if everyone were paying an equal amount into the insurance pool.
Universal coverage is not really an imposition on the healthy and infertile. Because, lets face it, most of them will have kids and/or get sick at some point in their lives. When they do they will be better off if they have comprehensive insurance based on the average medical expenses of the community rather than the average medical expenses of those of us who currently reside in sick land.
Therefore a mandate is a good thing.
Insurance companies should be able to charge people who are more likely to be sick more for insurance. It stands to reason that you should charge customers who cost you more higher rates for services. This increases your operating margin and this makes you a stronger company. If you are a stronger company then you can do more good in the world. What is good for Aetna is good for the nation.
Therefore health insurers should be able to charge geezers more.
So we have two good things? Right?
Did anyone else notice that allowing insurers to charge more for geezers sort of cancels out a universal mandate?
If you allow insurers to charge more for groups that have higher medical costs you are allowing them to create separate risk pools. The golden youth pay rates that reflect their overall health and live in their own low risk pool. The older folks are still stuck in the geezer ghetto and still pay high rates.
2 - 2 does not yet equal 4.
Universal coverage is good thing because that way everyone helps to pay for health care. Part of our current problem is that people who are healthy don't buy health insurance until they get sick or decide to have kids. Medical expenses of sick people and people who are having kids are higher than medical expenses of young healthy people. Therefore the premiums that people pay for insurance are higher than they might be if everyone were paying an equal amount into the insurance pool.
Universal coverage is not really an imposition on the healthy and infertile. Because, lets face it, most of them will have kids and/or get sick at some point in their lives. When they do they will be better off if they have comprehensive insurance based on the average medical expenses of the community rather than the average medical expenses of those of us who currently reside in sick land.
Therefore a mandate is a good thing.
Insurance companies should be able to charge people who are more likely to be sick more for insurance. It stands to reason that you should charge customers who cost you more higher rates for services. This increases your operating margin and this makes you a stronger company. If you are a stronger company then you can do more good in the world. What is good for Aetna is good for the nation.
Therefore health insurers should be able to charge geezers more.
So we have two good things? Right?
Did anyone else notice that allowing insurers to charge more for geezers sort of cancels out a universal mandate?
If you allow insurers to charge more for groups that have higher medical costs you are allowing them to create separate risk pools. The golden youth pay rates that reflect their overall health and live in their own low risk pool. The older folks are still stuck in the geezer ghetto and still pay high rates.
2 - 2 does not yet equal 4.
Comments