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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: geode00 who wrote (214996)	1/26/2007 12:39:29 PM
From: neolib	Read Replies (1) \| Respond to of 281500

It is very simple. If everyone is covered, than the insurance companies can swap customers because they can agree to give up xx bad ones and take on xx bads averaged over a reasonable time duration. This is done all the time in auto insurance, although the details vary by state law. It is what actuarial science does. There is zero problem provided it is not a new entrant with preexisting conditions. If you don't have mandatory coverage requirements than people do in fact pay $0 (they don't carry insurance) until suddenly they find themselves sick, at which point they want to sign up, pay one premium and send in a bill for $100K. That is not something actuarial methods can deal with. From a for-profit point of view, the insurance companies would rather everyone be a bad risk, and coverage be mandatory, since they skim a % of the gross business. Kicking the bad ones out reduces the average business. Not good. It is only done when the system allows people opt out on their own. As long as EVERYONE MUST carry coverage, the bad ones raise the average rates for everyone, hence are good business. Your answer shows quite clearly that you do not understand insurance in the least.