Yeah, I have no idea either.

DF — Wed, 11 Nov 2009 19:28:01 +0000

In reply to There are definitely ways to

Yeah, I have no idea either. It's one downside to enacting a hodge-podge of seemingly disparate reform initiatives as opposed to simply moving to a different system of finance.

There are definitely ways to

Michael Wolraich — Wed, 11 Nov 2009 17:25:32 +0000

In reply to G, I can't say whether this

There are definitely ways to avoid the problem, as you present, but I'm not sure how the current House plan avoids it, and I haven't seen anyone raising concern about it.

G, I can't say whether this

DF — Wed, 11 Nov 2009 07:20:10 +0000

In reply to Health Insurance - The Cheap Rider Problem

G, I can't say whether this is part of the House healthcare bill (if that's the bill you're referring to), but one proposed solution to this problem is to average costs over the whole population so that everyone pays the same amount for coverage. The argument for this is usually based on the upward pressure on healthcare demand as we age. So, we pay more when we're younger so that healthcare remains affordable when we're older.

Another way to address this problem, at least in part, is to do something that many other nations do: Fix prices for basic care and prohibit profits on the same. But the success of this depends on a unified payment system. Since everyone pays the same amount and costs of basic care are tightly regulated, patients who suddenly have greater needs don't need to jump to a "Cadillac plan" or a much more expensive risk pool.

As I think about this some more, both schemes seem to rely on essentially averaging costs among the population. When it comes down to it, private insurance is probably not the best model for financing healthcare. Maybe we'll figure that out someday.

dagblog - Comments for "Health Insurance - The Cheap Rider Problem"

Yeah, I have no idea either.

There are definitely ways to

G, I can't say whether this