[ExI] Health status insurance

Max More max at maxmore.com
Thu Jun 25 20:48:30 UTC 2009

I haven't seen this mentioned here yet, which is 
unfortunate the number of people who continue to 
equate the USA's heavily-regulated health 
insurance and health markets with a free market system:

Health-Status Insurance: How Markets Can Provide Health Security
by John H. Cochrane
Cato Institute, February 18, 2009

None of us has health insurance, really. If you 
develop a long-term condition such as heart 
disease or cancer, and if you then lose your job 
or are divorced, you can lose your health 
insurance. You now have a preexisting condition, 
and insurance will be enormously expensive­if it's available at all.

Free markets can solve this problem, and provide 
life-long, portable health security, while 
enhancing consumer choice and competition. 
"Health-status insurance" is the key. If you are 
diagnosed with a long-term, expensive condition, 
a health-status insurance policy will give you 
the resources to pay higher medical insurance 
premiums. Health-status insurance covers the risk 
of premium reclassification, just as medical 
insurance covers the risk of medical expenses.

With health-status insurance, you can always 
obtain medical insurance, no matter how sick you 
get, with no change in out-of-pocket costs. With 
health-status insurance, medical insurers would 
be allowed to charge sick people more than 
healthy people, and to compete intensely for all 
customers. People would have complete freedom to 
change jobs, move, or change medical insurers. 
Rigorous competition would allow us to obtain 
better medical care at lower cost.

Most regulations and policy proposals aimed at 
improving long-term insurance­including those 
advanced in Barack Obama's presidential campaign­ 
limit competition and consumer choice by banning 
risk-based premiums, forcing insurers to take all 
comers, strengthening employer-based or other 
forced pooling mechanisms, or introducing national health insurance.

The individual health insurance market is already 
moving in the direction of health-status 
insurance. To let health-status insurance emerge 
fully, we must remove the legal and regulatory 
pressure to provide employer-based group 
insurance over individual insurance and remove 
regulations limiting risk-based pricing and competition among health insurers.

An more accessible review by Ron Bailey:

The Health-Status Insurance Solution
How free markets can provide health security

Max More, Ph.D.
Strategic Philosopher
Extropy Institute Founder
max at maxmore.com

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