dispatches from TJICistan

http://feedproxy.google.com/~r/CoyoteBlo…

I have a high deductible health plan, which makes a ton of sense to me. For reasons I don’t understand, by increasing my deductible from $100 to $2500 I save over $3,000 a year in premiums. So even if I max my deductible every year, which I don’t, I still don’t pay as much in a year as my old BC/BS gold-plated policy.

Insurance companies love that some people choose to smoke, because it lets them raise the rates for the smokers … by more than the cost of the extra health claims that smoking causes.

Why?

Because smoking is a visible proxy variable for several other invisible variables. Smokers are senseless risk takers. 1,000 smokers are going to fall off the roof more often, get more venereal diseases, and crash into more hotdog carts than 1,000 apparently demographically identical non-smokers.

This phenomena shades into, at the margin, a related phenomena, of asymmetric information, where people choose between options using information that only they have.

What kind of person is unwilling to pay the first $2,500 out of pocket? A person that intends to make lots of claims.

They know that they’re going to use much of that first $2.5k.

Question: between one person who has no intention of going to the doctor for every little thing, and another person who does, let’s assume that both get broken legs, which push them each to $5k in expenses … which one is going to demand more follow up visits, cancel and reschedule more often, demand an extension on their course of painkillers, etc. ?

The one who was intending to use lots of service down at the low end, I’d wager my middle nut.

As usual, the folks who are experts in these matters know what they’re doing.

…a concept that would serve some people well

http://www.gormogons.com/2009/10/give-us…

The insurance industry released a report that concluded that ObamaCare “reforms” (as presently planned) would skyrocket healthcare costs.

The White House is foot-stamping mad about this. How could they say this? How could they scare Americans like this?

Probably, um, because they know more about healthcare than spend-happy lunatics like the Democrats?

This entry was posted on Tuesday, October 13th, 2009 at 8:47 am and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.