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In a fun discussion with a well-read and bright older woman at a picnic yesterday:

Woman: People with pre-existing medical conditions will never get health insurance under Ryan’s reforms

Me: People with pre-existing medical conditions should not be insurable (note that is nuance to this point, but that is for another blog post)

Woman: But that’s not right. Insurance works by putting the sick people in a pool with the healthy people, to “balance things out” and by the way, lots of insurance companies drop people with pre-existing conditions.

Me: If I were an insurance company, I would not even cover people with such conditions. In any case, in all of your life have you met anyone that was retroactively dropped by an insurance company for an illness or condition that they did not know of when they signed up for insurance?

Woman: No. But it is happening all over the place, why just this afternoon on CSPAN I heard about …

… and that’s when I poured a red plastic cup to the top with whiskey. As the discussion proceeded, it was clear that I was being held in contempt for trying to have her understand that insurance is only feasible for things that are uncertainties. There may be a case for helping folks out with pre-existing conditions, but those folks most surely do not belong in any insurance pool. If a super-well educated person cannot grasp this, I have little doubt that the “man on the street” does … or perhaps I should be more sanguine, maybe it’s the curse of being super-well educated that blinds us to such simple matters?

7 Responses to “This Week’s Sign of the Economic Apocalypse”

  1. Harry says:

    If one has paid for health insurance during one’s disease-free days, and gets a chronic expensive disease, the insurance company is bound to provide whatever benefits to which they have contracted. I know this simplifies it, but no insurance I have ever bought does not guarantee that they will not raise your premiums so you can afford it, whatever that means. This same principle applies not only to health insurance, but also to fire insurance, car insurance, or the thousands of policies Lloyds of London writes. Thank goodness the UN or the World Court has not got its grimy fingers on that.

    The fate of the uninsured ten year old who gets an intractable disease (who will get care) pales in comparison to the indiscriminate trillion-dollar plus bailout insurance provided by the US Treasury.

  2. Harry says:

    GM and Goldman Sachs had a pre-existing condition, too.

    It is disturbing hearing a Treasury undersecretary lecturing Pat Toomey about putting one class of creditors — holders of treasurys — ahead of other unsecured creditors, like he, who gets his salary that is supposed to get paid first. This is the tyranny of the clever bond lawyers, who get to rewrite the terms of the contract midstream to assure they will have plenty of money to pay the mortgage on their Falls Church estate. File this one in Government Gone Wild. Inflation, and Crony Capitalism.

  3. Michael says:

    Most people have no idea that there is a difference between an insurance plan and a coupon.

  4. Harry says:

    Right, Michael. Coupon, capon, it’s all the same. But I would argue that simple folk such as we have a better idea about finance than the wizards in Washington, or the folks on staff in congress, who have no doubts about their limitations.

  5. cmprostreet says:

    I tried to make that point about insurance not being the proper mechanism for dealing with a pre-existing problem during a debate in undergrad, right there at U of R. I used almost the exact same wording regarding uncertainty being a necessary condition for insurance. I was immediately called out as heartless and uncaring, as someone willing to let the sick die, and (inexplicably) as someone who evidently had a personal vendetta against people with chronic illnesses.

    At another debate, several individuals argued that economic growth is driven by education, and education is provided by the government, so government is the source of long-run economic growth, and in order to grow the economy faster the government should tax more in order to spend more.

    I don’t know if it’s a general lack of critical thinking skills, or an inability to listen to another point of view, or just succumbing to knee-jerk reactions that caused so many of those conversations to go that way, but considering that the people I was talking to were soon to graduate with me, I really wanted to go to the registrar and request that my diploma come with a disclaimer that I didn’t really want the same degree as everyone else.

    I partly blame the sheer amount of busywork that had to be done for so many classes (including in grad school) that had nothing to do with improving thought processes or seeing things from different angles, and from which the only skill to be gained was that of being slightly more proficient at busywork. Throw in some grade inflation and a few elective fluff classes, and you have countless people with a degree and a high GPA on their resume, but with all the thinking skills of a Xerox machine. I’ll be graduating with an MBA shortly, and still all I can think of is how many classes were way too time consuming and not nearly difficult enough.

  6. Rod says:

    People with pre-existing conditions have always been able to sign up for Blue Cross/Blue Shield during their “open enrollment” periods. If you’re unhealthy, it’s impossible to get low health insurance rates, but that’s as it should be. Thank goodness BC/BS can’t create federal reserve notes!

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