Monday, November 29, 2010

Putting the insurance business out of business

In this article in the Review Journal, it states,
Many -- even "moderate" Republicans -- have been heard of late to say, "There are sections of Obamacare that need tweaking, maybe even repeal. But there are some provisions that should be kept, that we can all agree make sense, including the ban on insurance companies refusing to cover people with pre-existing conditions."

This seems like a very good idea except that it will not work. As the article states later,
No insurance enterprise -- which spreads among participants the risk of future misfortunes which cannot be precisely predicted -- could long survive if people were allowed to buy "insurance" against unhappy events which had already occurred, paying in (say) $6,000 to get back a guaranteed $100,000.

The article ends by stating,
Certainly it's not a happy thing that one can't sign up for fire insurance on a house that's already burned down. But the laws of physics, economics and mathematics cannot be repealed by the central state, as they must eventually learn.

Unless, of course, the whole point is to drive the private insurance firms out of business.

Insurance is should be available to everyone. If one decides that they do not want insurance, they must suffer the consequences. However, the problem is that insurance is provided by employers in most cases and is cancelled when you lose your job. Then if you have pre-existing conditions, you cannot get insurance.

One suggestion is to have insurance which is yours as long as you pay for it. Your employer would reimburse you for the costs. The employer should be able to deduct it as an expense as they do now and you would not have to declare it as income. It would then go with you from employer to employer.

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