01-26-2013, 10:33 PM
Ted King wrote:
[quote=davester]
[quote=kj]
My thought is that almost everyone does something risky.
The insurance companies and their mathematicians beg to differ(at least to the degree of risk). The science of predetermining which populations will cost the most to take care of is well established. It is simply a fact that an obese sedentary alcoholic smoker is going to cost a fortune in healthcare costs compared to a nonsmoker who watches their weight and rides their bike to work.
This is where the granularity thing I was talking about earlier comes into my thinking. Like kj says, we all choose to do some things that will lead to additional health care costs some time during our lives. If the science of actuariness about health costs were completely mature, we would all wear monitors that would calculate to what degree each of our choices were going to lead to increased health care costs in the future and then your premium payments would be adjusted accordingly. But again like kj said, that would make the whole idea of insurance superfluous. And the whole approach ignores the extremely thorny problem of figuring out what kinds of things - and to what degree - do we do things that we have enough power of choice over to have some to-be-determined degree of responsibility.
Since we don't have a completely mature science of actuariness, we tend to just "look for the biggies" and single them out. I suppose you can make the case that there's a kind of fairness in going after "the biggies" and ignoring so many other things people do that also lead to increased health care costs since "the biggie" types of behavior do indeed lead to increased costs. It's just that at the fine grained level of people's behavior, it sure doesn't seem to me like picking on "the biggies" is the fairest thing to do. It's like a whole lot of people are getting together saying "let's make a risk pool" and even though we know a whole lot of people in the risk pool are going to be making choices that will lead to increased costs for the risk pool that are as much as the choices you will be making, because we have identified your area of choice and not theirs as too risky, you have to pay more. I don't see the pragmatic necessity to do this - the costs will be borne by the whole of the premium payers, what we are talking about is just who pays how much of that cost.
To my thinking, it just makes sense they would go from predicting the costs of larger groups to smaller and smaller groups, until they are predicting what you as an individual will cost (granularity?). An illustration of the above is that some smokers don't get cancer, likely because of their genetics. Of course, if you don't have the genetic predisposition toward cancer, you might cost less even if you smoke. And on it goes in the same fashion until everyone pays what they cost.
I wonder if the variables they use for prediction have more to do with the ease of measurement than they do the cost (the biggies). Or maybe the biggies are the easiest to measure/predict. I'm also not sure there is a lot of incentive for them to make sure individuals pay their "fair share", just so the whole group of insured pays enough to cover costs and profit. kj.