[ExI] Health status insurance
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.
Extropy Institute Founder
max at maxmore.com
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