Insurance and Health Insurance

I’ve been meaning to write a post on health insurance ever since hearing Karen Tumulty on Fresh Air. (She was discussing her Time article on underinsurance.) I happen to think that a free market for insurance works pretty well in most circumstances (and I did co-found an insurance software company); for example, if you can afford the house, you can generally afford the insurance for the house. But it doesn’t work very well for health care, because many people are simply uninsurable under free market principles (expected health care costs exceed their income, let alone their ability to pay), and hence would be left to die. We think we have a private, for-profit insurance  system today, but we can only avoid its disturbing implications by hedging it in with public backstops and regulations.

Since the Senate Finance Committee is taking up health care reform this week, I finally wrote that post today for The Hearing.

Originally published at the Baseline Scenario and reproduced here with the author’s permission.

One Response to "Insurance and Health Insurance"

  1. Anonymous   May 12, 2009 at 9:29 pm

    Health insurance was never meant to be a for-profit enterprise, because, as you say, many people are uninsurable under free market principles and would be left to die. That is inhuman and since we are humans in a human world, an inhuman principle cannot be tolerated without suffering and ultimate rebellion. The inhumanity of for-profit health insurance, i.e. denial of claims, denial of coverage, money-centered healthcare providers, other abuses, is the reason why people are so upset with it.