Pre-existing Nonsense

Until you break your arm and they tell you that having an arm is a pre-existing condition and thus not covered...

Let me know the company that does that to you, because I will be sure not to buy from them.

Casio, hedge fund, crony capitalism nearly brought down the world economy. Wall St. is rigged for the "in" inside people. The massive bank bonuses for CEO's of propped up failed banks is indicative of this cancer. There are plenty of sure thing bets that make capitalism rotundly evil, and you don't need to go to Las Vegas aka Lost Wages. The richest capitalist pig in the world, Carlos Slim, is from Mexico, where poverty, lawlessness, murder, corruption, and environmental degradation are rampant. He sits back on his lazy, fat ass and collects a fee for every phone call, collect or not, from every dirt poor Mexican peasant. This is sick, folks. Time to trash this evil, price fixing monopoly sucking off process that benefits the few at the expense of the many and give the poor people a real piece of the pie. As Bush said, "We ought to make the pie higher," instead of a pie in the face of the working class, with more Bush-style tax cuts for the upper class. Discredited supply-side Reaganomics is still the Rethuglican platform and must be opposed at every turn. Btw, why aren't the people who caused the financial crisis, like Phil Gramm and Greenspan, in jail where they belong alongside Jeff Skilling and Bernie Madoff? Phil Gramm, a PhD economist, is working for a foreign banking corporation (Swiss) with the title "Vice Chairman." He is really a consultant and lobbyist "appointed to support the business in their relationships with key clients." (-Wikipedia) He is the worst American traitor on the planet, who only cares about himself. Greenspan was playing his fiddle while America burned from an arson he was part and parcel of. Where was the libertarian outrage? It was mostly nonexistent, as far as I can see.

Out of curiosity, what is an actuarially fair premium for an event with a probability of 1?

Glad he decided to become an Economist and not an Actuary. I have trouble believing that even Krugman can feign to be this damn stupid.

It seems the most obvious criticism of Dr. Krugman's article is that he concedes that the federal and state governments have been heavily regulating and controling the whole health care/insurance industry for years. He also argues for the need for serious reform.

How can he, with a straight face, suggest that the solution for problems in the health care/insurance industry which is controlled by government agencies be even more government control?

That private health insurers should not cover pre-existing conditions is the reason there should be a health system to cover not only those, but also extreme cases. Otherwise we would face a eugenic regime in which the non healthy would become a second class citizen...

Why not make tax credits available for charitable medical service?

For-profit hospitals could take tax credits for providing services to qualified patients.

Doctors and nurses could subtract credits from their tax liability for providing services.

Corporations and individuals could subtract credits from their liability as well by making monetary contributions for the provision of medical services to those with health issues not covered by insurance.

And so on.

If there are enough people in a democracy that support such a proposal, to make it happen, then why does it have to happen at all? The same is true for all government "charity". And the historical results bear that out. Government "charity" at best displaces private charity.

There should be a separation of charity and state. Just like nearly everything else that a population wishes to provide, doing it through the government only makes it less effective, less efficient, more costly, and--most important--more violent.

That such credits aren't discussed makes me suspect that the politicos are afraid people might discover they aren't needed to help people out with such difficulties.

Very true. The same fear behind opposition of school vouchers.

The issue of coverage for preexisting conditions in group plans could have a partial solution if carriers were allow to exclude the specific pre-x condition, but cover non-preexisting conditions. This is called "lasering." Thus your chronic conditions would not be covered, but appendicitis would be.
While this leaves a large hole in coverage, the only way to provide coverage is for the insurance company to charge you a premium equal to the present value of all future treatments plus overhead and profit. Lasering might be helpful in the case of individuals who wait until a condition presents before attempting to purchase insurance.
The issue of coverage lapse because of loss of employment is best solved by decoupling insurance and employment.

In 1965 or so, when Medicare was first proposed, the "best" minds at the time predicted that by 1990 or so the cost to run the program would be around 9B. The actual cost of Medicare in 1990 was around 91B or an overrun by about a factor of 11. That's like contracting to build a house for200K and getting the bill upon completion and it's over a million dollars.

So say my healthcare economics textbook

I am very often impressed with your letters that you send and share but this one not so much. It seems way too absurd. The point, though, should be well-taken: that the whole point of insurance is radically defined when an insurer is now required to pay for an event that has already happened. And that do-gooders like Krugman want this 'insurance' to cover events that have already happened while recouping less in revenue than what it's costing them to provide the 'insurance' benefit.

I thought that economists were supposed to be able to observe costs, benefits, economic profits, supply & demand shifts, and uitility: what happened to Krugman's observation skills? Is he even an economist any longer?

Perhaps Krugman believes as well that there should be no pre-existing conditions applicable to obtaining jobs. In which case his stature as a Nobel winner should play no role in whether he or anyone else is hired as a columnist.

My mother died with mesothelioma. She had it a remarkable 1.5 years (a year longer than the longest-lived patient who had had it at the time). When she got sick, she was on my dad's insurance. When my dad switched jobs, he had to switch insurance. Know what happened? The new insurance picked up where the old insurance left off. She was insured to her dying day. When Krugman says insurers don't cover pre-existing conditions, he's a liar. I no longer give Krugman the benefit of the doubt. He knows what is true and misrepresents the facts all the time. He's a liar.

A good man knows what the good is and does it.
A bad man is ignorant of the good and therefore does bad.
An evil man knows what the good is and chooses against it.

I've come to my own conclusions about what Krugman is.

Your anecdote doesn't make Krugman a liar.

"The only part of health care in which there isn’t already a lot of federal intervention is the market in which individuals who can’t get employment-based coverage buy their own insurance. And that market, in case you hadn’t noticed, is a disaster — no coverage for people with pre-existing medical conditions, ..."

He refers specifically to "individuals who can’t get employment-based coverage". If your dad had to switch coverage when he switched jobs, he presumably had an employment-based, group policy before and after the switch, so your example is irrelevant. Let's stick to the facts and leave the ad hominem epithets to the know nothings.

In reality, we already have a massively state governed health care system in the U.S., so we aren't debating socialized medicine vs. the market. We're debating one corporatist system vs. another. Ron Paul is practically the only voice in Congress advocating market medicine, and maybe he's right, but one voice doesn't make a debate.

It is not an ad hominem attack to call a liar a liar. I was wrong about this particular case, having responded to this posting, and not to Krugman (an inexcusable mistake on my part), but Krugman has a long history of lying about economics, purposefully misinterpreting data, etc. -- unless he really is that incredibly incompetent economist, which I don't believe for a minute. So I would apologize to Krugman on this particular case while sticking to my general opinion of him.


Either way, I hardly support the current system. At the same time, I hear all sorts of things in the debate over health insurance that are at best misrepresentations. And that doesn't help anybody.

I think it would be helpful if everybody read these three paragraphs:

A free market in health insurance (which does not currently exist) would respect the rights of both insurers and customers to voluntarily contract to mutual benefit. In such a market, individuals who do not desire coverage for preexisting conditions would be free to purchase plans without such coverage from any insurer willing to sell such a policy. Likewise, those who do desire coverage for preexisting conditions would be free to purchase such coverage from any insurer willing to sell this kind of policy, which would likely and reasonably be more expensive—just as a buffet plus the dessert bar would be more expensive than a buffet alone. There is no such thing as a free lunch or a free dessert—or free insurance coverage.

In a free market, profit-seeking businessmen would likely sell insurance coverage to individuals with preexisting conditions for an appropriate price, just as they would seek to meet substantial demand for any service if profitable. However, in the unlikely event that some individuals sought to purchase a policy that covered preexisting conditions, and no insurer would sell them such a policy, they would still have a viable alternative. They would be free to form their own risk pool with other like-minded individuals willing to share those risks. They would be free to create their own insurance company.

In fact, many Americans have already formed private pools in which members voluntarily share each other’s health-care costs. For instance, more than 100,000 American Christians are members of “health-care sharing ministries”—arrangements whereby members pay a monthly fee to the ministries, which in turn distribute that money to other members facing expensive medical bills. Such groups typically accept members who meet certain religious and lifestyle requirements regardless of preexisting medical conditions.4

Unfortunately, these health-care sharing ministries currently cannot guarantee payments to their members, because the government would then treat them as insurance companies5 and subject them to myriad onerous state and federal regulations that specify what prices they may charge, what benefits they must offer, and which customers they must accept.6 The only thing preventing individuals from creating their own contractually binding risk pools today is the government.

From this article: http://www.theobjectivestandard.com/issues/2009...

Fabulous.

The better analogy would have you decide whether to make the bet after you have flipped the coin.

Does New York already require insurance to cover those with pre-existing conditions? I thought so and I thought the costs of insurance policies in New York is one of the highest in the nation. I just got a quote for the Empire Direct Pay HMO in the Bronx. ~$4,000 per month for monthly coverage. I believe this is pushing a lot of people go with lesser insurance plans in New York - like plans that just cover hospitalization.

I am surprised that AAA or someone like that doesn't offer a gap fill policy that would be structured similar to something like term life insurance.

Or a charity that specializes in collecting voluntary donations from those who would like to help those with pre-existing conditions out.

Yeah, and why don't auto insurance companies give you coverage if you call on the side of the road after an accident?

Or provide you with collision coverage when all you bought was liability! The bastards!

I wish liberals would be more straightforward. Just admit they want to put insurance out of business.

Are you referring to Krugman's comment that :
"And that market, in case you hadn’t noticed, is a disaster — no coverage for people with pre-existing medical conditions..."

This seems unfair to Krugman. He's not blaming the insurance companies for this, or saying it's "wrong". He's just saying it doesn't function the way he would want it to. I think you've grossly misrepresented him here.

In this article & most others, Krugman makes countless claims & analyses that are baloney packed in crap. You could limit yourself to things he actually writes & still have a lifetime's work ahead of you. This just hurts your credibility.

I wonder why Krugman doesn't write that the used car market is a disaster because it doesn't provide health coverage for people with pre-existing conditions. Could it be because he believes that those who participate in the health insurance market have some special obligation to provide care for those with pre-existing conditions that participants in the used car, corn futures and fancy belt buckle markets don't? In which case, isn't he saying that health insurance providers "should" provide this coverage? I can't think of any other interpretation that makes sense.

Great post.

And while we're at it, why don't health insurance companies pay for people's college educations? It must be because they are evil.

Come on, guys. Let's not be a Greek chorus, here. Krugman isn't blaming insurance companies for this. He's saying that there isn't a market for health care on pre-existing conditions, so the market isn't an answer for this. As Krugman goes, this isn't a completely bogus point.
All I'm saying is, take one of the other 10 blatant inanities from his article & respond to them. Twisting an arguably reasonable point into something unrelated to what he says is churlish. This blog has been a great educational tool. It will cease to be that if we start cheering poor posts like this one.

I think that there is more to it than that. Krugman is saying that the market has failed because it doesn't provide a particular service he has decided is a moral necessity. First of all, that is not a "market failure" in the economic sense. He is making a moral judgment on a MARKET and finding it wanting.

This is more than passing strange. If we feel that the use of heroin by grade school children is a bad thing, we don't blame the heroin MARKETS. We blame the people who sell heroin to children. So to whom does the moral opprobrium Krugman is dishing out stick to and is it warranted? Or is he really so confused that he feels that MARKETS, emergent phenomenon, are actually moral actors?!

Secondly, Krugman is advocating (further) government involvement - that is to say, force and violence - in the market in order to provide his morally required service. There must be some sort of connection between the market participants and the moral requirement to provide this particular service, or why doesn't he insist that banks, used car dealers or, more to the point, doctors provide these supply it?

In the final analysis Krugman's view is muddled and silly. Apparently, at this stage in his life he prefers pontificating, moral posturing and righteous indignation to thought.

There is a market for health care for pre-existing conditions. There is not market for health insurance, because an insurance market trades in risk, and a pre-existing condition is not a risk.

Some people with pre-existing conditions can't afford treatment necessary to alleviate their suffering or extend their lives. Markets don't address this problem. Only compassion can address it, and individual acts of charity aren't necessarily an effective remedy either. If we're having this debate, let's have it, rather than avoid it with elementary arithmetic lessons.

I specifically had Republicans in mind with my post, since they are all over the news talking about how "everyone" agrees we need insurance companies to cover pre-existing conditions, if the Democrats would just make a bipartisan bill.

It seems it may be a saving grace that the Democrats' bills are so partisan. God help us when the parties actually agree on something.

That's an excellent point, txslr, but I think Don's post is still unfair. You know, Daniel Keuhn isn't posting on this...does he have me under some sort of trance to do his bidding?

Regardless of fairness, the post misses the mark. Krugman's point is not simply arithmetic, so the arithmetic isn't persuasive.

Just stay away from muirgeo!!!!

Krugman doesn't say it's wrong that health insurers don’t cover pre-existing conditions. Some people with pre-existing conditions can't get coverage, and he thinks that's a problem. Is it a problem? How big is the problem? I don't know, but if insurance is a program of risk sharing, then a healthcare system offering treatment for pre-existing conditions is not an insurance system at all. Requiring people to join health care cost sharing collectives is not "insurance" in this sense. It's something else. The virtue of compelling this cost sharing is debatable, but we aren't debating "insurance" in the conventional sense.

Personally, I don't have a problem with compulsory health insurance coverage, for the same reason that I don't have a problem with compulsory automobile liability insurance. Everyone faces health risks, and a civil society doesn't leave people without means to die on the street. Failing to carry adequate health insurance takes a free ride on civilization by passing the cost of one's health risks onto others, just as failing to carry automobile liability insurance while driving takes a free ride on people potentially harmed by an automobile accident.

But compulsory health insurance is not a healthcare free-for-all. Everyone bears the risk of common, catastrophic illness and injury, and expecting everyone to bear the cost is equitable; however, everyone does not bear these risks in equal measure, so a rational market does not (and should not) charge everyone the same price, and an insurance market doesn't address pre-existing conditions at all, because a pre-existing condition is not a risk.

What, if anything, government should do about people with pre-existing conditions who cannot afford treatment is a legitimate debate, but it's not a debate over insurance, so Don's bet simply misses the mark.

Martinbrock,
While I have a tremendous problem with compulsory healthcare coverage (It is nothing less than the government taking posession of my body, declaring it to be a form of public property.) The limits on preexisting conditions are a critical problem for me. I am an independent professional artist previously diagnosed with Bi-polar Disorder. My wife has Fibromyalgia and chronic depression and all of my four children have had, at various time in their lives, to be treated for clinical depression. The vast majority of insurers won't cover us at all. By law the coverer of last resort in Texas must charge twice the going rate for commercial coverage, an impossible burden for one whose income is so uneven as mine.

So, I have to choose whom I will cover. For the time being that has only been my wife. There is an SCHIP option, but they don't want to cover the self-employed, preferring to keep the population mired in a mindless sheepdom where incomes are steadily reported.

All that said. I emphatically oppose federalized healthcare coverage as Democrats have formulated it. Better to die a free man than to be protected in a padded cell.

First, if I seem flippant here, you misunderstand me. I decided long ago that psychiatry is hardly more scientific than witch doctoring, so I haven't used the services in decades and don't ever intend to use them again. Better to blow my brains out than to expect amulets and incantations to solve my problems.

I also decided that any psychiatric label assigned to me is misassigned, so I don't acknowledge any assignment. Am I therefore "normal" now? Of course not. I deviate from the mean by more than a standard deviation in countless directions. Sometimes, the deviation is beneficial, sometimes not. So it goes.

So I advise you to stop being bipolar. I don't expect you to change your biochemistry or even your innate personality, only your faith in and interaction with the "medical" profession. You'll have as much luck consulting a shaman or a priest, and maybe you should. Priests can cost less, and you needn't acknowledge the consultation on a medical insurance application. Again, I'm not being flippant here, only offering my honest opinion based on my personal experience.

As for pre-existing conditions more generally, I sympathize with people with chronic illness, including emotional instability, with cancer in remission and the like. How to provide these people health care is a legitimate debate, and my libertarian ideals don't necessarily lead to an "every man for himself" conclusion, but I am extremely skeptical of central authority and entitlement. Best of luck to you.

This analogy between automobile insurance and health insurance seems wrong to me. The requirement for liability insurance is intended to guaranty that you have the capability of making whole those you may harm. The simple act of getting out on the common roadways visits a cost on other drivers - the probability weighted cost of the damage you may cause them (among other things). A requirement for liability insurance is just the way you pay that cost. Health insurance is protection for you against your getting sick and incurring large care expenses. This is not compensating some other party operating out in the commons, just you.

The fact that the government may take on the job of caring for some of those who cannot afford it themselves in no way changes the fundamental relationship because that is a cost that the government chooses to incur, unlike the cost forced upon others by your driving without the capability of making others whole. In other words, in the health care case the government could solve the problem of cost shifting by deciding not to care for the uninsured. No similar action can change the relationship between drivers.

Health insurance is protection for you against your getting sick and incurring large care expenses. This is not compensating some other party operating out in the commons, just you.

If a persons falling ill on the commons simply lie where they fall until they die, you're right, but my neck of the woods doesn't operate this way.

In other words, in the health care case the government could solve the problem of cost shifting by deciding not to care for the uninsured. No similar action can change the relationship between drivers.

Government could also decide not to enforce titles to property, but I don't expect that to happen. Civilizations have standards, and one such standard requires care for the desparately ill or injured regardless of their means at the time.

Civilizations do have such standards, but nowhere in that standard is there a requirement that care be provided by the government. You are falling prey to the assumption that services provided by charities rather than by the government are not provided at all or that civilization is identical to the government.

As for enforcing titles to property, the government is constituted to protect life, liberty and property. For this reason it is granted by the people a monopoly on the use of organized violence. Government is not constituted to apply that monopoly in order to provide for everything else a citizen might desire or require.

I haven't fallen prey to anything. I only say that voluntary charity need not address the problem and that a debate over compulsory measures is legitimate.

Government is constituted to protect life, liberty and property, exclusively, in your way of thinking, but your way of thinking is not universal. Even your sense of propriety, what is "proper" and thus "property", is not universal. People differ on what government is constituted to protect.

I oppose many intellectual property rights for example, while I support some traditional, parental rights no longer constituted by government, because I deem these rights proper and thus property of parents.

Saying that government is constituted for this purpose and not for that, like it's a law of nature or something, is not persuasive. It's only preaching to a choir.

"Government could also decide not to enforce titles to property, but I don't expect that to happen. Civilizations have standards, and one such standard requires care for the desparately ill or injured regardless of their means at the time."

I'm sorry, but your protestations to the contrary notwithstanding, that paragraph conflates two different things - the obligations of moral individuals in society and the proper role of government. Furthermore, you assert that civilizations have standards and then in your follow-up you say that civilizations don't have standards because no way of thinking is "universal". The advantage of my "way of thinking" is that it minimizes coercion. Your "way of thinking" (e.g. "saying that government is constituted for this purpose and not for that...is not persuasive") suggests that the entire question of the proper role of government is illegitimate, which is anti-intellectual at best, regardless of what you "deem" or "support".

Perhaps the most important point that comes from the entire conversation is that Krugman's argument is not economic. It is political philosophy and morals, subjects for which he is no more qualified to offer an expert opinion than I.

I don't conflate anything. Government could decide not to enforce titles to property, titles to intellectual property specifically, and government could decide not to compel participation in Medicare. Those are facts. Both standards are forcible, regardless of any conflation.

I don't say that government ought to do one because it does the other or that government ought to do either. Whether either is a proper role of government is debatable. The moral obligation of individuals is matter for individuals to decide.

I say that civilizations have standards. I also say that people do not agree, universally, on what these standards ought to be. I think no one should possess a patent on an algorithm for a general purpose computer, but my preference is not a standard. It's my preference. I have less of a problem with a copyright on a particular implementation of an algorithm, and I can explain my preference for one over the other, but I again explain my preference, not any standard. Standards are not my choice.

The proper role of government is a matter of opinion. I never anywhere suggest that it's not a fit subject for debate. That's you. I say the opposite. I'm hardly anti-intellectual. I have no idea how you reach this conclusion.

People sharing your preference for minimal coercion might find you more persuasive than others, but the minimally coercive role of government is also debatable. Is compelling respect for a software patent more or less coercive than enforcing some good samaritan standard? When you speak abstractly of "property", I hardly know what coercion you advocate.

Title to exclusive use of a parcel of land, or some other resource, doesn't exhaust lawful "property" and never has. Children are property of their parents traditionally, and wives are property of their husbands, and husbands are also property of their wives by the same standard, in Anglican tradition at least. None of these standards of propriety ever involved anything like the modern, commercial sense of "property" that you presumably imagine when summarizing the rights of man with "life, liberty and property".

That children are property of their parents implies far more parental obligations than parental rights, and this emphasis on the propriety of obligation is hardly new. It is thoroughly classical. The idea of "property" as exclusively a matter of right, as opposed to obligation, is modern.

Krugman's argument is ethical rather than economic, and Don's reply misses the mark for this reason. The proper role of government is not an economic question.

Most of what you have written is confusing. You switch from descriptive to normative and back again without acknowledging in any way that you've done it. You launch into a lengthy disquisition on whether one thing or another is property when the point regarded the general principle that government exists - in part - to enforce rights to property. Understanding every jot a tittle of intellectual property law is not germane to the question of whether protection of property is a legitimate role of government. To take a single point, you write:

"Is compelling respect for a software patent more or less coercive than enforcing some good samaritan standard? When you speak abstractly of "property", I hardly know what coercion you advocate."

The answer is - compelling respect for a software patent is a LEGITIMATE act of government coercion and enforcing a good samaritan standard is not. One addresses the protection of property, which is a natural function of government. You may not like the way patent laws have been written, but you cannot claim that they do not address issues of property. The good samaritan law is coercing personal action; an effort to codify moral behavior. This is not a legitimate role of government.

Also, it is clearly not related to protection of property, so why would my abstract definition of property weigh on it any more than my abstract definition of "chair"?

If you're confused, I'll try to clarify. I describe normative assertions as normative. Anytime I refer to "propriety", I refer a normative assertion, because "proper" describes a norm of behavior. A "property" is a lawful relationship, so when I say that a parcel of land is someone's property or (in an earlier sense) that a child is property of his father, I'm making a normative assertion about the relationship between a parcel of land and some person or a child and his father, because that's what "property" means.

The answer is - compelling respect for a software patent is a LEGITIMATE act of government coercion and enforcing a good samaritan standard is not.

Really? You read that on stone tablets somewhere? Heard it from a burning bush? Deduced it from "existence exists"?

One addresses the protection of property, which is a natural function of government.

Software patents are a natural function of government? You read that in a sequence of DNA or something? Before the Clinton administration, software patents hardly existed in U.S. law at all. Did Nature change Her mind? Or was it a few Justices of the Supreme Court and Q. Todd Dickinson? Do you understand that Clinton ran on expanding intellectual property rights and then made good on his campaign promises?

You may not like the way patent laws have been written, but you cannot claim that they do not address issues of property.

The statesmen decide what is "property" and what isn't, and I don't claim anything else, but if they decide that some disabled woman's daily bread is her property, and that you owe it to her, then that's "property" too. If you think it isn't, you may walk up to her and demand a share of her disability check financed from your income taxes. The police then will decide who is taking whose property. Good luck with that.

The good samaritan law is coercing personal action; an effort to codify moral behavior. This is not a legitimate role of government.

Obviously, you may assert any "legitimate role of government" you like, but granting and commanding respect for software patents also codifies moral behavior, by some standard of "morality", and the grants codify moral behavior that was not codified much before the Clinton administration. In fact, when I studied Computer Science in the early eighties, algorithms generally could not be patented. International patents hardly existed at the time either. They're a product of the Reagan administration.

If current intellectual property law had been operative at the time, Apple might have sued Microsoft over Windows on patent infringement grounds, rather than copyright grounds, and it might have won the suit, and the PC world might be a very different place today. Maybe you think it would be a more "natural" place. I think it would only be more regulated by the patent office.

Also, it is clearly not related to protection of property, so why would my abstract definition of property weigh on it any more than my abstract definition of "chair"?

Your abstract definition of property, whatever it is, somehow weighs on software patents. I don't know what else it commands armed men properly to compel, because I don't know precisely what your definition is, because you haven't told me. When you say that some good samaritan standard "is clearly not related to" property, you take some notion of "property" in your head for granted, as though you somehow decide what is "proper" and what isn't.

I don't think you exercise this authority. I know I don't. I only have my ideas of what ought to be property, and these ideas flow less from economics than from an ethical tradition. Economics can tell us something about the cost of compelling respect for particular standards, but it tells us nothing about whether the price is worth paying.

Since we're drifting far to the right here, you may have the last word.

"probability weighted cost of the damage you may cause them"

The same actuarial tables can be used to determine your risk of suffering at the hands of other motorists (and retreads, and flat tires, and blizzards, and meteorites, etc). That could be priced, and you could buy your own victim coverage.

The premiums may be expensive, but that really is no justification for a state forcing a driver to buy auto insurance.

My auto insurance has an uninsured motorist add-on which is fairly inexpensive. This in a state where auto insurance is mandatory.

If only I could buy a policy against unintelligent legislators, but that would be like trying to buy fire insurance for a burning house.

I have uninsured motorist coverage too. Of course, the number of total motorists is greater than the number of uninsured motorists, so in my world the single policy might be expected to cost as much as the regular liability + uninsured combined, depending on how you think this would affect incentives for people to drive safely.

I'm not saying there shouldn't still be liability. If someone hits you, your insurance company would still want to get the money out of them, maybe even if it meant litigation. And of course, that person would typically have his own insurance, which would offer a plan to cover accidents that are his fault.

So what is the difference between most places today, and my preference of everyone just deciding whether or not to buy their own victim and/or offender insurance? Very little, except the imposition of the state would be removed, so individuals could decide if they wanted to take the risk of driving without insurance, without also factoring in the risk of breaking the law. Not mandating policy purchase might have a downward affect on premiums, since it opens the market up to the competition of no purchase at all.

Any thoughts?

It's not fair for the millions of people living healthy lifestyles funding those with chronic illnesses from lifestyle choices(smoking, obesity). That is not the same as everyone having the equivalent catastrophic risk. In fact I'd wager the 2 greatest costs in our health care system are chronic lifestyle diseases and end-of-life.

Sharing health costs can be inequitable and counterproductive for the reasons you cite. "Equity" in this sense refers to responsibility for assets and their maintenance, not to some abstract sense of "equality".

Maintaining a two acre yard costs twice as much as maintaining a one acre yard, so a person with equity in (ownership of, responsibility for) a two acre yard pays twice as much for yard maintenance. That's not a matter of "fairness". It's a matter of economic rationality. The cost really is twice as much.

Taxing people with one acre yards to "equalize" the cost of yard maintenance for people with two acre yards strains credulity. Entitling people to all the gluttony and drunkenness they like is similarly difficult to defend.

I read this blog primarily because I am sympathetic to Austrian school economic views, and I tend to find Prof. Krugman's opinions to be horribly short sighted. However, in this instance, while I may not agree with Prof. Krugman, I also disagree with the characterization of insurers in this letter.

The implication is that health insurers operate within a free market, and exempt pre-existing conditions because that is what the market calls for in some circumstance or another. The truth is that health insurers operate in anything but a free market, but rather, have distorted the market for medical care beyond the reach of normal consumers so as to necessitate their services. They have done this by a combination of nanny-state regulation and union strong arming. Before health insurance was common place, a middle class family could readily afford to have a medical doctor come to their home to provide services. Today, that is anything but the case, and this is not due to increasing complexity of medical equipment and care, but rather the implementation of a pseudo-socialistic medical system run by corporations rather than government, providing lesser quality services and greater costs, as all socialist systems do. Look at the facts of todays medical care. Do you shop for the best doctor at the lowest cost. Do you compare one hospital from another to see which provides superior services for the money you are paying? No, you don't. You go where your insurance company tells you to go. So, while Prof. Krugman's inane assertion that practices of insurance companies are "not fair" is uncalled for, your implication that these practices exist because of market conditions is even further off the mark.

Health insurers operate in a market that is distorted by the actions of government, and they exempt pre-existing conditions because if they didn't they would go out of business. If the market were not distorted by the government they would still exempt pre-existing conditions because if they didn't they would go out of business.

So what's the point?

"they exempt pre-existing conditions because if they didn't they would go out of business"

Or if they quoted the requisite premium, nobody would pay it. There simply is not, and never can be, any such thing as a market for insuring pre-existing conditions.

I agree with most of what you say VV but there is a market for pre-exitsting conditions. I have a little company with 3 partners and 6 employees. One of the partners wife has advanced MS. BC BS of Illinois keeps raising our insurance the max amount because as a group we consume so much health care. We didn't think there was much we could do because BC BS would love to drop us but in talking with them we found we could have a high deductible-- we're still talking numbers but it will probably come to $20 k per family-- and our rate will go down correspondingly. We'll reimburse our employees so the new plan behaves like the old one, the partners will pay closer to what they actually consume, we'll still get BC BS "preferential" rates and based on previous years #s, we'll save a tiny bit. It occurs to us that this is turning what we call health insurance into actual health insurance. My family won't be making claims for pediatric, Ob Gyn, or physical rehab visits anymore. Most years we'll pay about $15k. My partner whose wife has MS will pay $20k plus about 10% over that number. This restores the pricing mechanism and if done by more market participants, I think competition would blossom and prices would decline.

That's really a great point.

But I don't see that as a market for preexisting conditions, per se. Don't you think coverage of pre-existing conditions in a group policy is an example of an indivisible package deal of different products? The premium price you pay (as part of your total cost of employment) is a combination of:

1. the financing of health care maintenance, and
2. insurance.

For your employees that package deal, in return for their labor, also includes:

3. wages from your company.

A package could be a mixed bag of any products. Maybe your neighbor will only sell you his car if you also agree to mow his lawn for a year and take out his daughter. Or maybe you can't buy his stable, unless you also buy his broken old horse, because he's getting out of the horse business altogether.

Insurance companies not only specialize in risk pricing, but also in financing, so it makes sense that it would be an insurance company, instead of say, a bank, that takes that package deal. Plus, they are already negotiating with health care providers for the insurance coverage.

Independent of the coupling of different products, any company, including an insurance company, might give you a discount for volume, just as a hospital might give the insurance company a discount for volume. Maybe the market for the package only exists because the burden of one the product (financing of some amount of chronic health care consumption) is offset by the group discount.

But packaging (either naturally or by choice) different kinds of products together sure is one way in which a free market might result in providing for all kinds of things for which you would not, individually, expect a market to exist.

Just another example of how complex and unpredictable markets can be when it comes to solving the needs of its participants.

Yes I also am driven insane that nobody talks about how heavily regulated insurance companies are. In fact every one of the 50 states has regulations on health insurance companies, some more then others.

Ok. So what do Americans propose to do for people who have a pre-existing condition and cannot afford health insurance. That is a question you cannot answer with economics alone.

How about making tax credits available for the provision of charity medical services?

One thing is clear with these progressives--the only charity they believe in comes at the point of a gun.

Suck it up.

I don't think you're framing the question correctly. It should read, "So what do Americans propose to do for people who have a pre-existing condition and cannot afford the health care services needed to alleviate the problems caused by said pre-existing condition?"

I don't know the answer. But I think it is very important use the correct language. Care, not insurance.

Consumers with pre-existing conditions are probably not priced out of the market because of their own lack of funds, but much more because there is no market to accomodate them. Why? Because there is no risk! Just like you will never find a fire insurance underwriter who will write a burning building, you will never find a health insurance underwriter who will write a person with a pre-existing condition. That's because doing so would defeat the very nature of the product.

Again, as I replied above to another poster, this is an overly constrained definition of insurance, given how it is usually employed. The government is considered the "insurer of last resort" for certain natural disasters like earthquakes and hurricanes, as well as for terrorism. Evidently, one is almost certain to need such a service eventually living in Florida rather than North Dakota, but language really isn't the main point of contention I think you would agree.

In terms of the market for sufferers of preexisting conditions, I believe there is one currently because the level of accuracy of measuring the risk is low. It is only because the risk is uncertain that the market exists. And it still exists in this case, which is why you can get insurance if you have a preexisting condition. However, if the uncertainty of the outcome vanishes under scientific progress, then the burning building analogy becomes more appropriate, and the potential for a functioning insurance market vanishes, as can be illustrated some elementary mathematics that I would be happy to share. If the uncertainty is zero, and the correlation is zero, between risks, then you will need some other system to provide health care if you are unlucky enough to be born with the wrong genetics. I have yet to hear a satisfactory answer to this problem.

Just like you will never find a fire insurance underwriter who will write a burning building, you will never find a health insurance underwriter who will write a person with a pre-existing condition. That's because doing so would defeat the very nature of the product.

Of course there are those who say it's immoral to make any amount of profit in health insurance. Of course if you forced insurance companies to take everyone, they'd simply charge astronomical monthly rates based on the pre-existing condition. Then the socialists would come in with price-regulation to prevent that and that will be the final death knell of health insurance industry.

See my post above as to why I think in the long run the insurance industry is not sustainable.

Of course if you forced insurance companies to take everyone, they'd simply charge astronomical monthly rates based on the pre-existing condition. Then the socialists would come in with price-regulation to prevent that and that will be the final death knell of health insurance industry.

And then the glorious state would get a pass for taxing people for the same consumption of resources, or restricting the consumption, because the real costs would be hidden from public perception.

Exactly. It's useful to engage in these thought experiments to see where progressiveness would take things to their logical conclusions. It's only too bad we don't have Republicans doing this to educate the masses on the real consequences if they allow Obama and the progressives to have their way.

A black market will develop where government doctors and nurses see patients in their off hours or take bribes to see them during the workday. You can legislate away official profits but not the profit motive.

"those who say it's immoral to make any amount of profit in health insurance"

More than anything else ever discovered by man, efficiency and productivity are inspired by profit motives. The result is commonly that prices drop well below any initial cost+profit. Armed with that fact, it would seem immoral to NOT profit from health insurance.

To socialists, when it comes to health-care "efficiency and productivity" are like buzz-words for murdering patients. It's like we're talking a different language.

I have lived in Singapore, which I believe has the most efficient health care system in the world. The level of care is exceptional and affordable. It works by creating incentives where they would be effective, and not bothering where they wouldn't be. So for minor illnesses that are preventable, essentially the individual pays. On the other hand if the condition is catastrophic (e.g. cancer), the state provides through taxation income. Any objections to such a system, other than the fact that it doesn't maximize the gain of someone is fortunate enough not to fall very ill?

It is an odd policy of the Singapore government, if true, since catastrophic events are cheap to insure for and private insurance for them is readily affordable. Look up the premiums for high deductible policies in the US.

The advances the Singapore system has in efficiency over other systems is that the government DOES NOT PAY for routine health care consumption. They unfortunately mandate that people save for those things, but those savings are, and forever remain, the private assets of the individual doing the savings. The mandated savings undoubtedly inflates prices by increasing demand for health care consumption (as the only way of accessing those savings), but not nearly to the degree of forcing everyone into a prepay use-it-or-lose-it third-party financing scheme such as defines both the private and government systems in the USA.

People would help them. Not people who are forced to through government, but regular people like you and me who are willing to help out. It will always work better than coercion. It will always be more effective than government.

If the goal is efficiency, independent of the requirement that everyone has access medical care, then the market will be more efficient, absent certain imperfections, or as I refer to them as a non economist, common facts of life.

If on the other hand you assume that everyone should have said access, only legislation of some kind can guarantee this, or so experience tells us, given that the US is the wealthiest country in the world and cannot find enough charity to cover a relatively small population of needy people compared to other nations.

If you're going to equip a police force to steal money to pay for people's healthcare, how about using that money to actually pay for their healthcare instead of redefining the word "insurance".

The definition of insurance is merely the indemnification of one party by another, however, if we are going to concern ourselves with pure semantics, then I'll play humour myself. References to the police and theft are irrelevant, clearly.

Except in rare circumstances, an "insurance" pool only generates a profit because the insurer is able to diversify the risk of an individual so that the variance of the overall loss distribution is smaller relative to the expected loss. This is a fundamental mathematical concept of any insurance pool. One problem with the healthcare context is that as advances in medical sciences are made, it will not only be possible to detect pre-existing conditions, but the likelihood of future ones as well. Then you will find a situation where there is no advantage to diversification because it will be known in advance who is most likely to need indemnification. You couldn't have a car insurance market if we knew with enough certainty who is going to have an accident. Furthermore, given that I think that society has an obligation to provide basic medical treatment to every individual regardless as to whether they have the means to pay for it, eventually a market that is not legislated to ensure the basic right to access medical access care will leave a sizable portion of the population unprotected, particularly in a country with poor levels of general health, such as the united states.

"The definition of insurance is merely the indemnification of one party by another"

By redefining insurance, you are making my point. Insurance is one way to contract for indemnification. Insurance does not equal indemnification. I personally sign many indemnification clauses with companies (like rental car and apartment leasing companies) in order to use their products, and nobody has every accused me of peddling insurance.

Insurance is a product. The product is a hedge against uncertain risk. Some people sell it, if they think it is to their advantage. Other people buy it, if they think it is to their advantage. Surely you can see that would be a product some people would value. If you wish to call "insurance" something else, then you will need to let me know the name of this popular product that I describe.


"References to the police and theft are irrelevant."

If either of those are involved in the transaction agreement, then the transaction is no longer "insurance". Either the purchaser, or the seller, or both, is pricing in the cost of fines or imprisonment, rather than the value of the actual hedge. And in almost every instance, people consider the cost of illegality to trump all other considerations.

By some legal definitions, transactions are not even indemnification, unless the contractual obligation was voluntary. It would not be an inappropriate use of those terms to say that Medicare, Medicaid, Social Security, and unemployment "insurance" are neither insurance, nor indemnification. But we shouldn't suffer the ambiguity of the language when trying to understand what people mean. We should keep the root concepts clear.


"Except in rare circumstances, an "insurance" pool only generates a profit because the insurer is able to diversify the risk of an individual so that the variance of the overall loss distribution is smaller relative to the expected loss. This is a fundamental mathematical concept of any insurance pool."

The "fundamental mathematical concept" you are trying to describe is the law of large numbers--an observation that a limiting distribution is approached as the number of observed events increases. If I want to insure you, and only you, for an event, then I will have to charge you the full cost of that event as your first premium payment (unless I'm a high stakes gambler, unlike insurance companies). If I insure 1000 people like you, the chances of all 1000 of you suffering the event in the first year is exceedingly small, so I can discount the premium for all of you down a level of acceptable risk for me.

The purpose isn't to spread the risk, or shift costs. That is an inevitable outcome with a pool of insurance customers, but not the purpose. The more information the company has, the more the premium will reflect the risk. The more you will be able to save on some events, and the more you will have to be charged to cover other events. And information is a valuable commodity. It also means you have more opportunity to plan your life. This is an economic savings--it represents fewer resources being consumed on insurance, freeing them up for other purposes.

But what about, e.g., the person who has the Huntington's gene? Well, since his chance of developing complications of Huntington's disease approaches 100%, the only applicable insurance, would be insurance to cover him if he DOESN'T develop Huntington's disease--a policy that would be very inexpensive. The problem is not with insurance, it is with people imagining that insurance is something that it is not, like a financing plan. Health insurance companies routinely sell health care financing plans, but don't let that confuse you as to the meaning of the word "insurance". "Financing" already has a word.

But the method of making a profit, or even the fact of making a profit, is irrelevant to policy. If I want to put my $1 billion family inheritance up as reserves to peacefully offer to sell you an insurance policy against *ANY* particular event set of my choosing at *ANY* price of my choosing, then it frankly isn't your or Nancy Pelosi's business how or if I intend to make a profit.


"One problem with the healthcare context is that as advances in medical sciences are made, it will not only be possible to detect pre-existing conditions, but the likelihood of future ones as well. Then you will find a situation where there is no advantage to diversification because it will be known in advance who is most likely to need indemnification. You couldn't have a car insurance market if we knew with enough certainty who is going to have an accident."

Yes, you can't have insurance if there is no uncertainty. There aren't too many policies against the sun rising tomorrow. If you know who is going to crash, then please do them a favor and warn them not to drive. If you know that you are NOT going to get sick or have a car accident, then you will save a lot of money by not buying insurance. However, the world is such that there will always be uncertainty, and therefore always be a desire for insurance products.


"Furthermore, given that I think that society has an obligation to provide basic medical treatment to every individual regardless as to whether they have the means to pay for it, eventually a market that is not legislated to ensure the basic right to access medical access care will leave a sizable portion of the population unprotected, particularly in a country with poor levels of general health, such as the united states."

Saying that "society has an obligation" makes as much literal sense as saying that "society wears a miniskirt". Nothing but an individual human being can have an obligation, and an obligation is not just what some distant stranger tries to claim it is. What people usually mean when they say "society has an obligation" is that some people must be forced to provide for other people. It is as simple, and as violent, as that.

Who is this "society" person and how did he/she get stuck with such a big obligation?

vv is two for two. Keep it up!

I was a little more proud of my lottery reply to jorod, but thanks!

Its about warping a definition to meet your own needs. Insurance is not insurance anymore. Just like liberal isn't liberal etc... The waters have been muddied.

How can an "economist" pretend that the cost of government has no effect on the cost of medical service or on the ability of people to pay for it?

The demand for common sense from his readers is low, so he doesn't supply it. *nods*

The demand for economic logic from his readers is nonexistent.

We're not talking about an economist. We're talking about Krugman.

Oh, yeah. Guess that's why I put it in ""s.

I knew you'd come through on this one:

#
sk8russ [Moderator] 12 hours ago
How might the authors of this blog respond to this column by Krugman?

http://www.nytimes.com/2010/03/12/opinion/12kru...

#
vidyohs [Moderator] 3 hours ago in reply to sk8russ

I would hope they wouldn't have to in order for you personally to see and understand the typical disingenuous presentation by Krugman.

He points to the fact that government already has screwed up medicare and medicaid, as well as the employer based insurance portion of health care, and then claims that a total takeover will fix it? Umm, kinda of hard to swallow by a long time observer of government in action. No, it is total health care deform, nothing less.

Then he claims that total health care takeover, deform, will actually reduce the deficit (save money). Anyone naive enough to believe that you can use the same providers, the same facilities, and expect both to operate in quantity and quality to cover millions and millions of new insured and do so while saving money is a person who has lost touch with reality, the obvious state of Krugman when you understand he is one of the socialist faithful.

Lastly, where are tomorrow's doctors and nurses going to come from in sufficient quantity and quality when they see that the position of health care provider has been reduced to no more than a processor in a human meat mill, and no more financially rewarding to boot?

This health care deform of the loony left is a disaster.

If we could get government totally out of our business, our health care, the free market would be temporarily punishing for most as it would take time for that free market ship to stabilize. Once stabilized, good market priced health care would be available to those who take responsibility for themselves, which is as it should be in accordance with the freedom in natural law. This is a system in which a very minor few might suffer if charity can't be found, but from which the vast majority would benefit.

But, the loonies are not going to let that stabilization happen, they are going to keep piling excess cargo(baggage) on top of the already overloaded ship until it capsizes. In doing so they ensure that the suffering of deprivation is felt by all but the elites, the czars, the commissars administering the social system.

Contrast those two paragraphs.

In the first one suggesting free market, only a very small minority will suffer some deprivation, the vast majority will have what they need.

In the second suggesting total takeover, deform, the vast majority will suffer the deprivation, and the very small minority will have what they need (and deserve because of their elite skills at administering.).

In terms of human compassion, I firmly believe government should butt out of markets, let we the people suffer the temporary turmoil, in order to get to stability in the short term.

That's your besy post ever!

If people want to be insured against possible pre-existing conditions they should buy insurance for that contingency. See, all fixed.

What happens if a patient gets a chronic disease? Then they will have to make sure they are covered with no gaps for the rest of their life. What happens to them if they lose their job due to this chronic illness and then can't afford private insurance, thus causing a gap? Is the insurance company of their next job then justified in denying them coverage due to a "pre-existing" condition?

I am amazed at the efforts made to portray what is obviously a shades-of-grey issue in simplistic black and white terms. Is it really that difficult to see the other side of the issue, i.e. from the perspective of a patient?

That sounds to me like a problem resulting for out dependence upon employers for health insurance, and an argument in favor of decoupling the two.

If you have a chronic condition, you need medical care, not medical insurance. Insurance covers against risks. There is no risk of you contracting the chronic condition you already have.

You can't buy fire insurance and get a payout for your house after the house burned down. You can't buy car insurance and get a payout for your car after it was wrecked. You can't buy life insurance after you're dead.

Why is it different for medical conditions?

To answer your question directly, the reason that it is different is because houses and cars can't develop chronic diseases.

Nearly any risk, for which data are available, could potentially be priced. Parents could find out what newborn insurance would cost. The payout would be very high for a lifetime congenital illness, but the risk may be very very low.

Sure they can ... and we insure against these risks. Termites for houses, rust for cars.

I agree with you, but can the insurance company come back and tell you that the termites in your house or the rust on your car are pre-existing conditions AFTER you have already paid for the insurance?

Assume that you buy termite insurance, for example, at a time when your house is completely free of termites. Then a few years go buy and you develop a chronic termite problem. It turns out that you need to have the termite people come in every 3 months to kill the bugs. In this situation, you are certainly going to keep renewing your policy! Furthermore, I don't know of any situation that would prevent you from renewing.

Unfortunately, the same isn't true for health care. There are numerous situations that CAN prevent those with chronic illnesses from renewing their policy. Getting laid off is one of them.

One of the things about insuring houses and cars, or any property, is that the insurer has defined limits. They can always weigh the cost of intervention against payment for a total loss less residual value.

In medical insurance, while there is a limit, they don't have the same options. Government mandates may require coverage of expenses that may have little or nothing to do with the value of the "property" (such as psychiatric care or substance abuse treatment). Also, since there is no "residual value" it's almost impossible to determine where costs exceed benefits. In a free market, these issues really could be worked out in advance.

You have misread my argument. Consider a person who already has insurance and then develops a chronic condition. This person has insured himself against the risk. The problem is that insurance contracts last for a limited amount of time. Externalities such as losing one's job can interfere with the ability of the patient to remain insured and thus allow the insurance company to unfairly deny coverage to an individual who has done his best to insure himself.

I am essentially making the point that if a person develops a chronic disease while insured, this person should be allowed to remain insured instead of being unfairly discriminated against due to a situation that is beyond his control. This is why the pre-existing conditions issue is not as black and white as you seem to presume.

The problem is that insurance contracts last for a limited amount of time.

There, you said it. Forcing people to change (and reapply for) health insurance every time they change jobs is nothing short of insane.

Health status insurance might be a solution. Cochrane says it doesn't exist because of over-regulation, but I'm not so sure about that.

I apologize for misreading your reply.

You are correct that if you get health insurance through your employer and if that insurance contract expires when you lose your job, and that the contract only stipulates limited ongoing payments, then you may be in trouble.

However, there are plenty of ways to avoid this situation: firstly, you could purchase insurance outside of employment. Secondly, you could use the savings earned from the cheaper employer-based insurance to pay for medical care when your employment ends. Thirdly, you may be able to negotiate a better health insurance contract with your employer, or have your employer negotiate a better contract for health insurance to obtain large one-time payouts for health conditions and/or continuation of health insurance contracts untied to employment.

Or you could join muirgeo and form your own insurance company that provide whatever policy you feel is best for your customers.

I'm sure there are many more options available too.

Oh, and houses and cars do develop chronic conditions.

Unfortunately, the problem is that none of these options are affordable in reality. To assert the contrary is to live in a fantasy world. Once a gap in coverage appears, the chronic disease becomes pre-existing and the patient is unable to obtain insurance. This gap is only possible because it is impossible for the patient to renew his employer-based health insurance contract due to the loss of his job. An event which may be beyond his control.

Those who develop chronic conditions while insured shouldn't be faced with situations like this.

The purpose of insurance mandates is to end insurance, not improve it.

Not sure what you mean here...

Once again, I don't follow.

Insurance is a product you purchase to hedge against uncertain events. People can offer the product because they know that with large enough numbers, their cash outflow will be approximately the event cost (insurance payout) times the risk, plus their overhead. They use that expense information, tack on 2-6% profit (or whatever the market will bear) to make a living, and the result is your premium.

But if you have already had the event, then the risk is 100%--there is no uncertainty of the event. Therefore there is no hedging of uncertainty. Therefore what you are buying is not insurance. You are buying a financing plan. You could probably just take out a loan from a bank and the payments would be similar (depending on bank overhead and interest rates).

So, outlawing pre-existing condition exclusions is the same as outlawing health insurance. This is unfortunate, because real insurance is not harmful, but rather of value to many people.

Other mandates have similar effects. They restrict risk calculations, mandate that customers buy insurance products that they don't want, and don't allow insurance companies to even offer some profitable products (by regulating premiums and payouts).

The fact that some people's risks *require* premiums that are higher than they would like or can afford, simply means that insurance isn't an appropriate product for them. The problem is not the insurance market, it is the person's risk. Insurance is a product only intended for low risk events.

The cost of very high risk (or certain) events is not a problem that should, or can, be addressed by insurance.

Now I see what you mean. Thank you for clarifying.

It ceases to be insurance. Insurance is the pooling of money to hedge against a specific future loss. If you've already lost, who are you going to get to pool their money with you?

Right, that's the point I was making. I'm trying to follow from that Viking's assertion that "the purpose of insurance mandates is to end insurance" [emphasis mine].

He/she has either worded it poorly, or my reading comprehension is poor. Policy maker's foolishness is readily on display. I can believe they'll unintentionally harm an industry. But destruction of the industry as an end? I might be cynical, but I'm not that cynical.

I see three possibilities --

1) They honestly believe what they're saying, and they're just ignorant.

2) They believe in the objective, and will say anything to accomplish it -- in which case they're simply deceitful.

3) They don't believe in anything, but love their job -- in which case they're evil.

Ignorant, deceitful, or evil. It's amazing that we even care. But, there is a difference ...

I'm sure 4) and 5) are coming.

It occurs to me that 1,2, and 3 aren't, by necessity mutually exclusive. The truth is likely more complex.

I think the complexity is rationalizing -- the truth is pretty simple.

"unintentionally"

That's where we disagree. Particularly with the latest Reid/Pelosi/Obama proposals. Left wing henchmen have already admitted as much.

Could you be more specific? I don't believe it's beneath them (particularly in an election season), but I have difficulty believing they'd destroy such a significant tax base out of spite.

Socialist and communist theorists have for decades written that government run medicine is perhaps the single most important advance toward a socialist state. Don't think that is not what all of this is about.

I'm not convinced the Obama et al are communist or socialist in the sense that you refer to. I don't see a conspiracy here.

Here's what Obama said to the AFL-CIO on 6/30/2003:

"A single payer health care plan, a universal health care plan. And that’s what I’d like to see. And as all of you know, we may not get their (sic) immediately. Because firs (sic) we have to take back the white house, we have to take back the senate, we have to take back the house.”

HHS Secretary Kathleen Sebelius told an audience at the JFK Center in 2007:

"I'm all for a single-payer system, uh ... eventually. I think what we have to do, though, is work with what we've got in order to close the gap."

You are right that it is not a conspiracy. I would think that either you are very young, or live in a kind of bubble to not realize what is going on.

From where you are, you have two ways to get up to speed. (1) you can immerse yourself in the leftist movement, as though you are a passionate leftist, reading literature and listening to speeches from and for the progressive, socialist, and communist movements over the last century. But health care policy as a tool of socialist ends is just a small part of what that market likes to consume, so you will labor long to concentrate what you are looking for.

Or (2), you can read the rightist (or at least anti-leftist) literature that attempts to concentrate just the relevant materials from the leftists to identify those connections for you. Of course, you have to scrutinize every source, because that literature if full of careless unsubstantiated, and sometimes outright false, claims.

Lenin may or may not have actually said that socialized medicine was the keystone in the arch of the communist state, but it is of course a *necessary* stone in that arch, as well as a central goal of those across the statist, especially leftist, spectrum for the last century.

Here are some tidbits to get you started:

http://www.youtube.com/watch?v=B-_SGGcJu_c
http://www.youtube.com/watch?v=o6ZH1ps20WA
http://www.youtube.com/watch?v=Loi_Vqu7Z28
http://www.youtube.com/watch?v=n66xbpUcskU
http://www.youtube.com/watch?v=hEEtScHIC1U
http://www.politicalaffairs.net/article/article...

If you watched "Saw VI", you'd know what some liberals would like to do to insurance employees. *shudder*

vikingvista nailed it.

I agree. Isn't the point of insurance to protect against some future event? Insuring a pre-existing condition seems like a contradiction in terms to me.

Perhaps I read too much into it.

But if we did away with pre-existing conditions, more people would have health insurance who really need it. They could get treatments before the disease became catastrophic, perhaps saving money in the long run. And what about people who lose their jobs? Should they lose their health insurance too? It seems like you are compounding the problem. If we didn't have per-existing condition requirements, maybe people wouldn't push for Obama care... Wouldn't it be better to have people paying something instead of nothing and relying on the taxpayer? Of course, we could just put people out in the wilderness and let them die.

"And what about people who lose their jobs? Should they lose their health insurance too?"

No, they shouldn't. And many conservatives have been pointing out for years that tying health insurance to employment is idiotic, while liberals have generally sought to increase mandates on employers to provide it.

If we did away we pre-existing conditions, we wouldn't have health insurance anymore. We'd have an entitlement to health care financed by taxation.

But if we did away with pre-existing conditions, more people would have health insurance who really need it. They could get treatments before the disease became catastrophic, perhaps saving money in the long run.

People keep making this claim and I keep wondering about its validity. The authors of this study claim that people who lead healthy lifestyles incur more health care costs than smokers or obese people because of the fact that the healthy people are not only living longer lives but also incurring large health care costs at the end of their lives. Wouldn't it also stand to reason then (if the conclusions that were reached in that study are true) that if more people were to use health insurance to treat diseases in their earlier stages by virtue of having health insurance then overall health care costs would rise in the long-run for the same reasons? I'm no economist, so maybe I'm not seeing something in that study that others would see, but it seems to me that if health care costs are truly a problem then we'd all really be better off smoking, eating, and drinking ourselves to death so that we don't live long post-working years lives that result in huge costs that aren't covered by being productive workers.

"They could get treatments before the disease became catastrophic, perhaps saving money in the long run."

Believe it or not, lottery tickets are a net collective loss to lottery players in spite of all the jackpot winners. Of course, I would never deny any player from valuing his odds however he wished.

>"But if we did away with pre-existing conditions, more people would have health insurance who really need it. "

I couldn't get past the first sentence. If you could explain what it says, maybe I could figure out what it means.

I actually have to agree, here. Not buying insurance "until you really need it" defeats the entire purpose of insurance. By the time you really need it, your reason for needing it is a preexisting condition. Let's use car insurance as an example. Laws aside, getting into a wreck qualifies as an instance in which I would really need insurance (unless I had sufficient cash reserves). Of course, now that I really need it, I can't go out and purchase insurance after the fact.

Insurance covers you for what might happen, not for what has happened. Pre-existing conditions must be accounted for when charging the customer for the service. An individual who needs preventative care represents an expense, and the condition for which they are practicing the prevention represents a potentially larger expense for the future.

A similar case would, again, be car insurance. No serious complaint is made against charging more for insurance for teenage drivers. Why? Because it is expected and understood that teenage drivers tend to be more reckless and, so, more prone to accidents. They represent a large potential cost.

Should the potential costs be actualized - should that teenager get into a wreck - then the high premiums will have allowed the insurance company to save or invest and grow such that it can handle the premiums of the teenage driver without impacting its ability to be prepared to handle other cases.

But to demand that an insurance company provide a limitless amount of care or payout to individuals regardless of the amount those individuals may need - or even simply use because of the mask placed over costs, which should not be discounted - is to ask that an insurance company run with its costs exceeding its intake. To use another analogy, consistently eating fewer calories than your body needs to run is not long sustainable.

if we did away with pre-existing conditions, more people would have health insurance who really need it.

Probably not. Individuals could save money by not purchasing the insurance until the really needed it. Payouts would be limited because insurance companies wouldn't have as much premium revenue to work with (unless they increased premiums, which price some people of purchasing insurance entirely, defeating the purpose). Incentives matter.

Let's take this further, Don.

With regards to laying flat, there are only two possible states.

With regards to landing on edge, there are an infinite number of possible states, depending upon which part of the outer edge is making the actual contact with the ground. Let's be gracious and call it a billion.

Given that Krugman has literally billions of more possible ways to win than you, your suggested payout is stacked more than 1,000-to-1 in his favor.

You ignore the rotational asymmetry of the coin's face.

That is canceled out exactly by the rotational asymmetry of the edgewise coin, which could point in every compass direction, exactly like the coin flat on the ground.

The rotational asymmetry on that axis is canceled, but for the edgewise coin there is an extra dimension of asymmetry. ;)

But can you tell us whether the coin had its tail or its head up its asymmetry?

I don't have to. There are only two resting states for the coin in a "flat" landing.

Let's examine it this way, and instead of attributing an Infinite value, we can agree to look at it from 360-degrees of orientation.

For a coin landing flat, it will be in one of two different states, with 360 degrees of orientation about the X axis.

For an edgewise landing, there are actually 360 different surfaces along that edge that could be touching the ground. Likewise, there are 360 degrees of orientation with respect to the line one would see if he were looking straight down at the coin, on the Z axis.

Given discrete integer measurements for degrees, all of those possibilities add up to 129,000 permutations.

Since the flat-landing coin only has 720, there are far more possibilities for the edge-wise landings.

Extrapolate the 360-degree measurements to their infinite counterparts, and you will see 1-Infinite factor for flat landings, and 2-Infinites for the edgewise. Therefore it's pointless to talk about quantifying those differences as being a factor of 180 or so...

Either way -- with all those permutations, Krugman would be a fool to ignore the pre-existing condition of the probabilities, and their actual weights based on observable history.

Did you keep a straight face through all of that?

I am a wicked poker player. ;)

If insurance paid for pre-existing conditions I wouldn't pay for it until I had a condition that needed treating.

The moral hazard seems obvious. I hope I'm misreading him.

I think you know you're not, MnM.

...But I like lying to myself. ;o)

That's how I gained 20 pounds once. Lying to yourself is never pretty :)

Unless, of course, politicians had already thought of that and come up with a scheme to force you to buy health insurance from the evil health insurance companies...

If an insurer was allowed to profit by covering your pre-existing conditions, you would not want to buy it.

I don't follow.

It would not be too difficult for an insurance company to calculate the likely cost of treatment needed by someone with a pre-existing condition. They could then take that projected cost and add a reasonable profit and price the insurance policy accordingly.

The problem is that the insured would be better off paying for the treatment themselves and leaving the insurance company out of the equation. An insurance company has to charge more than they are likely to have to pay out.

I will be happy to sell you fire insurance on your burning house but it will cost you more than the replacement value of the house.

Right...I make a similar point below.

Yep, no doubt about it-he's either a wh*re or a zombie.