Some thoughts on health insurance, it’s about CONTROL fundamentally, not health

Don’t worry the behavioral economists are on it.

There is a solution to the health insurance issue. It’s fairly ovious. As a former insurance underwriter I am very familiar with it. Catastrophic insurance.

Most people don’t need “well visits” or if they do $50 for a visit a year seems pretty reasonable to me. But people do need coverage in the event of something like cancer or a car crash. Such policies can likely be underwritten profitably and people can likely be covered at a very reasonable cost as catastrophic losses are usually far and few between.

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Aetna CEO Says Young People Pick Weekend Beer Over Obamacare

In fairness young people pick weekend beer over lots of things, not just Obamacare. But point made. Costs go up and up. More and more young, healthy people opt out. The sicker the Obamacare population is. And then eventually insurance singularity, implosion.

This is what is known as a death spiral in the insurance underwriting world.

Of course if the pols “get the regulation right” maybe the insurance companies that are pulling out now might come back,

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Here comes the death spiral: Obamacare’s Prognosis Grows Dimmer

It was already pretty dim for anyone who understands how insurance works. I used to be an insurance underwriter (property and casualty, not health) and I’ve been wondering since the beginning how anyone thought Obamacare was going to work. The risk size versus the pool of insureds doesn’t make sense. If insurance companies can’t adjust for risk (which for the most part they can’t under Obamacare) what bizarro mathematics is going to save this ill-conceived juggernaut of bureaucratic bull?

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White House to Health Insurers: Don’t raise rates ahead of elections, we’ll get taxpayers to pay the difference

Healthcare rates are going up for many people in 2015, and the White House is afraid that people will be unhappy about this. So unhappy that Democrats might be punished at the polls. But if health insurers keep their rates artificially low through the elections new rules unveiled recently by the administration will make sure the giant insurance companies won’t lose any money.

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The Health Insurer Bailout is Headed Your Way

All the big health care insurance stocks are up big over the last year. (And continue to be.) What does that tell you? Source: Yahoo Finance

There are a few winners in Obamacare. Very few, but they do exist. If one has an extreme medical condition it is easier to get insurance now. (Sort of.) The health insurers, in partnership with the federal government are also winners.  (At least in the short to medium term.) They now have access to a pool of taxpayer subsidized potential policy holders who were not part of the market before.

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Here comes the health insurer bailout (to be paid for by you and me of course).

Apparently deep within the bowels of Obamacare is a provision which says that if an insurer who participates in the Obamacare exchanges loses over 3% more than they thought they would they can recoup 50% of that loss from the taxpayer. If the companies lose 8% they can recoup 80% of that loss.

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