I did not mean to imply it was a good or socially responsible system. It is indeed a crappy system.
I was only trying to describe it, as it stands, the perspective of the INSURER.
In our current system, insurer means "the company that is trying to make a (hopefully fair) profit from each and every customer". In a system such as this the insurer is not paid to evaluate how or why some people are more expensive to insure than others only that, to the best of the company's ability, he should price each individual policy in line with the financial risk the being assumed by the company for writing that policy. To do otherwise will eventually cause the company to go out of business. If the company charges healthy customer relatively higher premiums than they as an individual "deserve" to have to pay based on their consumption of healthcare services in order to "cover" their ability to insure less-healthy customers at a discount the healthy customers will leave the company - The healthy customers being able to find better rates elsewhere. This will leave the company with too many unprofitable customers and cause it to go bankrupt.
To compare to my analogy the company can not take into account WHY someone choose to live at the base of the volcano -- perhaps that is where 20 generations of their family have always been buried and this person has a strong sense of family. To be blunt that is not the company's job ... it's not why they are in business. The company is in busness to make a profit pay their employees and shareholders and not to take on imprudent risks with the company's funds. The underwriters job is to assess a "fair" profitable premium for each and every policy.
Again, I'm not saying its right or good, only that its "the way it is". At least that's my opinion o of the way I see that it is. Don't kill the messenger
Jim
I was only trying to describe it, as it stands, the perspective of the INSURER.
In our current system, insurer means "the company that is trying to make a (hopefully fair) profit from each and every customer". In a system such as this the insurer is not paid to evaluate how or why some people are more expensive to insure than others only that, to the best of the company's ability, he should price each individual policy in line with the financial risk the being assumed by the company for writing that policy. To do otherwise will eventually cause the company to go out of business. If the company charges healthy customer relatively higher premiums than they as an individual "deserve" to have to pay based on their consumption of healthcare services in order to "cover" their ability to insure less-healthy customers at a discount the healthy customers will leave the company - The healthy customers being able to find better rates elsewhere. This will leave the company with too many unprofitable customers and cause it to go bankrupt.
To compare to my analogy the company can not take into account WHY someone choose to live at the base of the volcano -- perhaps that is where 20 generations of their family have always been buried and this person has a strong sense of family. To be blunt that is not the company's job ... it's not why they are in business. The company is in busness to make a profit pay their employees and shareholders and not to take on imprudent risks with the company's funds. The underwriters job is to assess a "fair" profitable premium for each and every policy.
Again, I'm not saying its right or good, only that its "the way it is". At least that's my opinion o of the way I see that it is. Don't kill the messenger
Jim