It appears Congress is again on the precipice of Obamacare repeal. Rather than debate the demerits of that legislation or its potential successor, I’ll instead address the related injuries to our collective wit.
Since health insurance falls into the broad raft of media-mandated dissembling, some terms are probably warranted. Insurance is you paying me a premium to indemnify you against the risk of loss. That is the risk of loss, not its certainty. That’s a fundamental difference for the few commenters hateful enough to acknowledge it.
A key component of the insurance industry is the act of underwriting. Underwriting is the task of evaluating and pricing risk. The best underwriters are paid handsome salaries because they perform premium non-commoditized labor. When executed capably, this labor results in cooing shareholders and fat bonuses. Here’s a very simplistic example:
If I believe there is a 10% annual chance you will cost me a million dollars in claims, then I will charge you $100,000 as a minimum premium baseline. But if I am a poor underwriter, and the risk is actually a 25% annual chance of $10 million dollars then I have cost my employer $2.4 million dollars in the first year. This providing a perfect opportunity to upgrade my resume with descriptions like “results-oriented team player.”
Underwriting risk is not just an exercise in maximizing profit, but in minimizing pain. It is as key to survival in business as it is in the jungle. Whether you are an Amazonian tribesman evaluating the risks of eating a colorful frog, or a trader at the Goldman bond desk scrutinizing mortgage derivatives, accurately assessing risk is how men remain viable and vertical.
And since underwriting–that is to say thinking, calculating, weighing, and considering–is such an innate and inseparable element of adaptive human behavior, we should not be at all surprised to learn that it was outlawed by Obamacare. In the words of its liberal authors, it barred “discrimination” against people with preexisting conditions. But the truth is Obamacare does discriminate…against people without preexisting conditions. This being a drearily familiar model to that of the US “civil rights” framework.
In any event, the Obamacare underwriting ban meant two things: insurers couldn’t a) deny coverage to people who would cost more than they could pay, or b) charge higher premiums for the sick. So the tribesmen underwriters had to eat the dull green frogs and the bright orange ones too.
But mandating coverage for a known condition with known costs isn’t actually insurance at all. It’s simply cost transference. If there’s a 100% chance you are going to cost me $100,000 year for a $10,000 premium, you’re not asking for an insurer, you’re asking for a patron. And the unwilling Obamacare patrons are the young and healthy people forced to subsidize the $90,000 difference.
Whether or not you believe this is a moral position, insurance isn’t the product being described here. And gone almost completely unremarked upon is the fact that many people are now priced out of the actual insurance market because the ban on medical underwriting does not permit them to be rewarded with lower premiums for their healthy lifestyles. An obese lifelong smoker with emphysema can’t be charged more than a lean healthy ascetic, which also means the ascetic can’t be charged less than the smoker. For some, that’s probably depressing enough to contemplate over a mouthful of Marlboros.
So if I understand correctly (and I’ll grant I may not), tonight’s latest repeal iteration would allow states to reinstate medical underwriting at their discretion. Liberals are naturally howling at the excavation of immoral states’ rights. This being a concept about which they were writing sonnets some 30 minutes ago when it involved voiding federal immigration enforcement orders.
Though the presumed reform legislation would exert an undeniable gravity. States that choose medical underwriting programs (i.e., conservative states) will heavily incentivize in-migration of healthy people for the lower rates and out-migration of the old and sick in recoil from higher rates. Thus liberal states will lose their subsidizing payers as they gain healthcare consumers.
That suggests a very poor prognosis for bruised Berkeley antifas. And I don’t know what health outcome could possibly be better.