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Comment by lumberjack | Hacker News Reader

Is this good or bad from a societal point of view?

It seems like a way to try to calculate and thereby eliminate risk, would be an overall beneficial thing. But then it also seems to make insurance less effective overall.

Let's not think about big "evil" insurance companies for a moment. Say there are 10 Amish guys who want to form a risk pool to provide emergency health care for their families. They were just about to finalize the contract when one of them proposes that they take a medical exam beforehand. It transpires that one of them has lung cancer. Why would the other nine allow the poor guy to partake in their risk pooling?

If you eliminate risk you also eliminate the need for insurance. This seems like a good thing. But then you also leave a bunch of people helpless.

It's an interesting ethical question.

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> Let's not think about big "evil" insurance companies for a moment. Say there are 10 Amish guys who want to form a risk pool to provide emergency health care for their families. They were just about to finalize the contract when one of them proposes that they take a medical exam beforehand. It transpires that one of them has lung cancer. Why would the other nine allow the poor guy to partake in their risk pooling?

We aren't talking about big "evil" insurance companies, we are talking only about the measure of success in a capitalist economy - and from that point of view insuring the 10th guy will constitute a loss.

On the other hand as a society we actually can afford to treat the 10th guy with cancer and if that we aren't doing so is an ethical failure not an economic one.

> On the other hand as a society we actually can afford to treat the 10th guy with cancer and if that we aren't doing so is an ethical failure not an economic one.

Whatever else may be said about health care and insurance, I feel it boils down to two questions: can we afford to cover everyone, and should we?

If the answer to the first question is "yes", how could it be ethical to answer "no" to the second question?

Fair answer.

The question is, what amount or level of coverage is used to determine affordability. Should we, ethically, user resources to transplant a kidney in an 80 year old which might extend their life by 5 years or should we use those resources to treat more individuals with less severe issues that will likely extend their life for a longer period of time? Time and qualified doctors are limited resources. How do we determine how to allocate then? Where are we starting the line on what and when to treat certain conditions (and to determine affordability)?

I would love to live in a society with those problems. Right now, we're still squabbling over issues like those mentioned in the article. My only comeback to your initial question is: why does the 80yo need a kidney? Is it because he burned the old one out with drugs? I'm all for holding people accountable for health problems they can prevent (like obesity - many health insurance plans give you a discount (rightfully so) for being in the healthy BMI range), but the problem comes up when insurance is run as a business, and of course the first way to cut costs (and increase profits) is to stop insuring those who you know will cost more (whether it's their fault or not).

Who gets to decide what's a morally acceptable way to become injured and what isn't? If the 80 year old has turned their life around at 65, and has been mentoring at-youth kids, do we still reject them for their earlier mistakes? Should we give it to a 25 year old who injured himself playing hockey, despite that being a high-risk activity as well?

If there is a scarcity and we can't heal everyone, those choices have to be made, but my original context was that the answer is that we can afford to help everyone. In that situation, I don't think there's an ethical reason to not help everyone.

Before the medical exam the reasoning would have been "any of us could have lung cancer. So we'll all pay so that the one person unlucky enough to have it doesn't have their finances ruined". After the medical exam the reasoning is "we already know who rolled the dice and lost. Fuck 'em, they can suffer on their own, us lucky ones will help each other out and throw the others to the wolves". I know which society I'd prefer to live in.

The more we know about who is and is not going to need care the better we are able to see past the veil of ignorance and let our selfishness and greed make our decisions rather than our sense of fairness and community. Having the information certainly helps providers become more efficient, but that efficiency comes at the human cost of throwing anyone who gets sick under the bus.

I'm not so sure health insurance should be allowed to be privatized in the first place; it almost inevitably leads to disgusting moral hazard and disaster. But it currently is privatized so I'd say any information private insurers get is a net loss for society.

From a societal point of view, I feel that healthcare should be available to everyone regardless of ability to pay. That makes it more like redistribution than insurance. Describing it as "insurance" is just a way of selling the idea to people who believe in markets, and it backfires in exactly the way you describe when insurers begin to discriminate.

Exactly. We need to stop calling it "insurance" if that's not what it is.

I will damage my health a little just to stay in hospital forever for free.

I would rather allow you to do that than require you to harm other people if you want to be provided for in an institutional setting.

That's my favourite argument for nationalized health care (insurance)! _Everyone_ pays the insurance and so the risks can be accounted for actuarially without leaving anyone behind.

The problem with this is that it creates moral hazard. There are lots of individual acts which are fun that I might engage in (e.g., gluttony, gay sex, inactivity, smoking, drugs) but which impose potential costs on others. Why is it reasonable for me to enjoy these benefits while others pay the costs?

One way to mitigate this would be with Singapore-style high deductible insurance - subsidies only kick in after you've spent 10-20% of your income on medicine.

See also "too big to fail", federally subsidized flood insurance, student loan guarantees, etc, all of which have the same problem.

In the UK for example, when you buy cigarettes you pay 77% tax. The total tax receipts for this tax are about £9bn per year, whereas the NHS spends only £2.7bn. (Figures from http://news.bbc.co.uk/1/hi/health/7654153.stm, 2008.) Therefore, you could argue that the costs of this behaviour are fully funded. The point is, there are other ways to deter dangerous acts than via insurance premiums.

>>The problem with this is that it creates moral hazard. There are lots of individual acts which are fun that I might engage in (e.g., gluttony, gay sex, inactivity, smoking, drugs) but which impose potential costs on others. Why is it reasonable for me to enjoy these benefits while others pay the costs?

Does it not work the exact same way with private insurance? If you require treatment, you increase premiums for everyone, not just yourself.

Anyway, I'm personally super happy with national insurance because I simply don't have to think about it. I know that if I need an operation, I will get one. I know that if I have an accident, and they need to send a helicopter to get me, I won't even see the bill for that. If I need to stay in hospital for the next year of my life, I won't see the bill. If I lose my job and become homeless I'm still going to be covered. I don't need to worry which hospital to go to, or which doctor/dentist can see me - they all can, there's no receipt produced, it's simply not a worry I have. Right now I pay about ~$100USD a month for the national health insurance, and it's an amount I am extremely happy to pay. Why would I care that other people are having accidents or smoking?

If private insurance can account for your risky behavior (as the article is describing, then no. Private insurance doesn't have this problem. And again, high deductibles mitigate it, since your risky behavior can cause you to lose 20% of your income, but still protect you from tail risk.

Why would I care that other people are having accidents or smoking?

Because you are paying for the consequences of their actions. A quick google search suggests more than 20% of the (far more than $100/month) Americans pay is caused by gluttony alone: http://www.healthycommunitieshealthyfuture.org/learn-the-fac...

That's about 1/3 of what we spent on our overpriced military. And that ignores the costs inflicted by overweight but not obese people as well as various other unhealthy behaviors.

In a country where medical professionals have no other options and therefore take low salaries, this may be less of an issue. But in the US medicine is very expensive, so it costs us a lot.

If you are talking about insurance in the pure actuarial sense, the company can choose to charge higher rates or not carry people that engage in excessive risks.

Of course insurance is not purely actuarial anymore, if it ever was.

>> gay sex

I heard promiscuous straight people can catch AIDS too! No way that's really true though, right?

They can. It's just far less likely.

http://www.cdc.gov/hiv/basics/statistics.html

Simple division (63% of HIV infections / 2% of population) / (25% of HIV infections / 98% of population) suggests gay sex is about 120x as risky as straight sex.

I think you mean unprotected anal sex, not "gay" sex.

Considering that insurance companies cannot exclude by law, aren't you paying for those things even if you go for private insurance over public insurance?

The issue is not exclusion, it's actuarial pricing. If companies can't exclude, but can charge people their expected cost, insurance works just fine and fitness vegetable girl doesn't subsidize hypochondriac unprotected gay junkie glutton. The latter person just pays a lot more.

https://en.wikipedia.org/wiki/Central_limit_theorem#Lyapunov...

The first problem then is how the insurance company determines that you're a junkie glutton because the sources of information from which they conceivably have access(search engine results, super market discount card, and other aggregated data sources), do not correlate 1 to 1 with behaviour. In addition to this, there is no mechanism of appeal in which one could contest their appraisal.

Then there is also the issue that the working poor buy shittier food because it's cheaper and more convenient, so their business logic creates a paradox where the assumption that all behaviour’s can be modified and accounted for economically really stops making sense. Trying to hold poor people accountable for their poverty by increase their costs of living can't possibly work and a major health crisis currently is diabetes which is directly related to the cheapest and most sugar filled things eaten disproportionally by mostly poor peole (in the US anyway, thanks to cheap corn). This is true in other ways as well, for example commute time is related to housing cost, stress is related to driving time, stress is related to poor health. Increased commute time can lead to less sleep, less sleep leads to poor health. there are probably infinitely more... Live in a trailer? You're being exposed constantly to toxins being emitted by the fibre board that everything in your house is made from; by "insurance" logic people that live in trailers make bad health decisions and should be charged more so that the cost of living in trailers is the same as the cost of living some where non toxic. So then should we subsidize housing instead? or let that person become homeless.

tldr; being poor = 'bad health behaviour' and so poor people will be disproportionately punished for their existing poverty with additional poverty.

The article is pretty explicitly discussing new ways for insurance companies to get better data on your lifestyle.

The poor don't buy overeat because it's cheaper. Those poor (mostly obese) diabetics you discuss could have saved money by consuming less food. That's fine - they can make their own choices, apparently they value twinkies over health. But it's not right to force the rest of us to pay for those choices.

In much the same way, it's not right to force third parties to live with pollution just so a factory owner can save money by not upgrading his machines.

Its not about twinkies. meat comes in different grades. Produce without pesticides cost more. The cheapest food - rice contains levels of arsenic that become a problem when eaten every day. It stops being a choice when you can't afford the other options. The factory owner could also discontinue pollution by simply shutting down.

What happens when they get a copy of your genome?

The whole point or insurance is exactly to do what you have described. To pool risk. Insurers are hoping to reduce risk to increase profit while basically destroying the concept of insurance itself.

This is exactly why insurance should by law be a non-for-profit enterprise. Making it a capitalist enterprise will always lead to these sorts of games.

Even if it is beneficial, their calculations of risk will be imprecise causing unjust penalties.

It is an interesting question. But why Amish?

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