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Comment by jrmg | Hacker News Reader

> being forced to buy insurance with a premium so high my risk adjusted return for self insuring is actually higher

This is how all insurance works though. Everyone pays in, and those unlucky enough to experience catastrophic problems get a way bigger payout than those who don’t.

Pooling risk is the entire point of insurance. Without that, it’s not insurance, it’s just a payment system, and those unfortunate enough to have big problems have to pay more.

Perhaps your views of what a society should be ‘for’ means you think that the unfortunate just having to pay more is fair, but I don’t.

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That infact is not how insurance works. You don't charge low risk people insane premia because it isn't fair. My car insurance is far cheaper than my sister's for this reason for example.

Even if I had an event (outside something way out in the tails where I might not even want the treatment anyway if it's free because my QoL suffers too much either way) I'm coming out with a loss because I'm forced to subsidize care for high risk people as well as very bloated administration. Having the insurance doesn't make sense.

even when you're one of the people that needs healthcare

Insurance is an instrument for trading volatility not socializing costs. Those are radically different things.

Right but you'll quickly see that analogy doesn't work in another way. With car insurance, its possible I can pay into it my entire life and NEVER have an accident (my current trajectory). I deserve a lower rate!

With health insurance, you are 100% guaranteed to become sick and die, at some point. So the options are either, everyone pays in and it covers everyone, or it only covers a small subset of issues, and everyone gets dropped when they get really sick (the prior state). The latter is definitely cheaper, because its cheaper to let people die / let them suffer than it is to keep them alive / healthy. That is effectively the choice to make.

Healthcare costs will grow without bound near the end. Your model only works if everyone choses every treatment available in the end which is just dumb because the outcome is the same.

It's appropriate for premia to be very high for geriatrics. The appropriate response is to chose when you're done not to crush younger workers so you can sit in a hospital bed for an extra month.

Also an exponential distribution is still a probability distribution you can trade volatility on.

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