Actually, I'm pretty sure that I understand insurance fairly well, though I am by no means an expert. We are, to some extent, saying the same thing. I am defining the business of health insurance by their function with relation to the purchaser of their service. I buy insurance so they will pay out when I am in need of it. That is the service I pay for. You are defining their business by what they need to do in order to be profitable.
There are some big differences between auto insurance and health insurance. Auto insurance is closer to catastrophic health insurance than it is typical health insurance. Catastrophic coverage deals with very unusual and high dollar incidents, like auto coverage, flood insurance, etc. Typical health care coverage deals with much more routine issues where the payouts happen frequently and most every policy holder draws upon the coverage to various extents during a calendar year. Part of the complexity in the national health care insurance debate does deal with catastrophic versus routine coverage. Catastrophic care costs can really skew risk pools. Some people argue for that to mean that government should exclude catastrophic care, leave that to private insurance and deal with routine care. Many others argue for the exact opposite. One of the liabilities of Medicare is that it primarily serves the population most likely to suffer from catastrophic care needs, making them the poorest return on investment from the perspective of putting together a risk pool. One of the advantages of a national single payer health setup would be reducing the risk pool by incorporating larger numbers of people less likely to suffer from catastrophic care needs. That, obviously, is not in the best interests of private insurance because the younger people that are less likely to suffer from catastrophic care events are the bread and butter of the insurance industry. And that's just the thing: the insurance industry is not in the business of insuring people that are going to need to to have payouts happen. Judah On Mon, Feb 16, 2009 at 2:43 PM, Gruss Gott <grussg...@gmail.com> wrote: > >> Judah wrote: >> Here's what you don't seem to get. Paying out is not only a cost of >> doing business, it *is* their business. > > Wrong. You REALLY don't understand insurance. > > The consumer doesn't want to have unpredictable and/or unmanagable > costs, so they hire an insurance company to buy some of that risk from > them. > > The business of an insurance company is to buy and manage risk. > > My mother hasn't had a car accident in her entire life, but she's > carried insurance the whole time. The insurance company has never had > to pay out once, so that must NOT be their business. > > Paying out is, therefore, simply a COST of doing business NOT their business. > > In the case of my mother they've managed costs through a managed > process of assessing and buying profitable risk. > > And, yes, they are part of the financial services sector. > > ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Adobe® ColdFusion® 8 software 8 is the most important and dramatic release to date Get the Free Trial http://ad.doubleclick.net/clk;207172674;29440083;f Archive: http://www.houseoffusion.com/groups/cf-community/message.cfm/messageid:288730 Subscription: http://www.houseoffusion.com/groups/cf-community/subscribe.cfm Unsubscribe: http://www.houseoffusion.com/cf_lists/unsubscribe.cfm?user=11502.10531.5
