From: mccall@mksol.dseg.ti.com (fred j mccall 575-3539)
Subject: Re: Forbes on health insurance
Organization: Texas Instruments, Inc
Distribution: tx
Date: Fri, 22 Jan 1993 14:56:29 GMT

In article <1993Jan20.213956.10545@raid.dell.com> mikepb@lupus.dell.com writes:
>In article <1993Jan19.150054.17906@mksol.dseg.ti.com>, mccall@mksol.dseg.ti.com (fred j mccall 575-3539) writes:

>>> Uh, John, this is what insurance is all about.  Spreading the risks
>>> and costs around among a large number of people.  The people in the
>>> group are 'subsidizing' the people who get sick or need care.  This is
>>> considered a FEATURE, not a bug.  You can't do away with the subsidy
>>> part and still have insurance work (unless you expect the insurance
>>> company to simply print money somehow).
>
>Wrong!  

Well, there's the first indicator that you don't know what you're
talking about.  Always look with question on any posting that starts
with "wrong!" or "bzzzzzt!".

>If I am of an age and health that has a average yearly medical
>expense of $500 a year and the other guy $2500 a year.  I would pay a
>little more than $500 a year for my insurance, while the other guy will pay
>more than $2500.  

You're making a hell of a lot of assumptions here.  You and he could
wind up in exactly the same risk group, depending on just how broad
the categories are.  Hell, I haven't used my health insurance in 9
years.  Am I subsidizing the other people in my risk group?  You bet! 

>I am not subsidizing him, nor he me.  When the insurance
>company figures out your premium, it is based on "Probabilities" based on
>your risk.  Can you say "actuary?"  

Yes.  Can you say "non-perfect world"?  Can you say "in theory only"?
Can you pull your head out?

>The insurance company is "playing the
>odds" and making more money than they pay out with large groups of
>"customers."  They turn around and invest all that money in the market,
>real estate, etc.  

Gee, tell me somre more simplifications about how things work that I
already know.  Better yet, look into the details and *maybe* you'll be
able to tell me something about the situation that I don't already
know. 

>Did you know the largest block of stock purchasers is
>insurance companies?  They own more stock on Wall Street than any other
>group.  

So?  You have a point?

[And yes, I knew that.  Obviously, though, you're quite proud of the
fact that you do, so carry on.]

>Subsidizing would mean a clser to flat premium for all.  

Nonsense.  First, closer to flat premium than WHAT?  I suggest you
check out what 'subsidy' means.  It certianly has nothing to do with
flat premiums on insurance.

>Like I
>would pay $500 for my years insurance and the other guy would pay $1500.
>Someone is subsidizing the other $1000.  (like my tax money)  I get screwed
>to the tune of $1000 in taxes a year while he SAVES $1000 a year! THAT is
>Subsidy!

Yes, but so is your paying $500 and not using any of your benefits.
You are subsidizing the health care of the other people in your risk
category (however broad it may be -- and it might just include that
'other guy').

-- 
"Insisting on perfect safety is for people who don't have the balls to live
 in the real world."   -- Mary Shafer, NASA Ames Dryden
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Fred.McCall@dseg.ti.com - I don't speak for others and they don't speak for me.