While this is primarily a P&C insurance blog, I would be remiss if I didn’t pass along a link to the best article I’ve read about how to solve the Obamacare dilemma. You’ll find it at www.InsuranceThoughtLeadership.com (ITL):
‘Single Payer’: the Wrong Debate
I’ve advocated something like this for years since I attended a presentation by former Senator, Dr. Bill Frist at a local CPCU I-Day. He provided statistics about health and longevity. I forget the actual numbers but, by far, the most important factors are genetics and lifestyle. The former we can do little or nothing about, but the latter is largely within our control individually and collectively.
The real shocker was how small a role in health and longevity the medical care system really plays. My memory could be off, but I believe it was something like 10-15%. So, the type of system really doesn’t make a whole lot of difference in how well we are or how long we will. As the ITL article suggests, the real issue is pricing.
I’ve opined for years that we should abolish the NFIP and windstorm pools, mandate property coverage by all owners and tenants, and include flood and windstorm damage in standard homeowners, commercial property, auto, and other policies. Minimum and maximum catastrophe loadings could be established so that there is some degree of subsidization in more risky areas. CRITICAL, though, would be mandated loss control measures, including zoning restrictions, building codes, and so forth. Loss prevention and reduction would be absolutely necessary components of an insurance program, as they should be now.
The same would be true for a national healthcare insurance or funding program. Establish minimum and maximum premiums, with ‘lifestyle’ loadings of various types. Provide incentives for lifestyle changes. There would be challenges with such a system, but it would likely be fairer and overall health improvement and financial control measures could reduce overall costs.
Anyway, I encourage you to read the ITL article. What do you think? Feel free to Comment below, but let’s focus on the risk management and insurance aspects of the discussion and not the politics.
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Bill Wilson
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The article is simply brepackaging the same failed socialist mentality. Since when did a monopoly ever work? They do not and cannot. It takes a free market and we will have none of that in the health foeld. So if you are wealthy you cna opt out. Otherwise you can just die and redice the number of useless eaters by your death, Any questions?
My wife and I have Medicare and have used it for about 10 years. Most of our doctors don’t take it and we have to pay cash and fortunately I am able to pay without great hardship.
My daughter, on the other hand, make little as a nanny and must pay for ACA coverage with an $8,000 deductible that she cannot afford.
Medicare fraud is rampant and if you read my Newsletter you know that few are convicted and appropriately punished. If 320 million people were covered by Medicare the amount of fraud would take the greatest proportion of the premiums collected.
ACA should be deleted and insurers set free to produce insurance policies at a reasonable and profitable price based on insurance concepts. A government can’t even spell insurance let alone run an insurance program.
“…mandate property coverage by all owners and tenants,..” and “….mandated loss control measures, including zoning restrictions, building codes, and so forth.” You went full authoritarianism on us. Would we put people in jail or take their property “for their own good” – that’s the road that this type of government control would take you. I am very skeptical. For example, home sprinkler systems. While they would save property and lives – are they worth the cost? And who benefits? (pipefitters union, for example).
Tom, as the last sentence in my post indicated, I’d like to avoid a political discussion. Nothing in my post even remotely hinted at putting people in jail or taking their property “for their own good.” Dating contemporaneously to at least the Great Fire of London in 1666, cities have established zoning ordinances and building codes to protect the public. What neighborhood would want a chemical plant or a munitions factory on a residential street? Who would want six-story, wood frame, unsprinklered apartment buildings that house 500 units? My P&C comments were directed at catastrophic exposures like floods and hurricanes.
Bill, when you “mandate” you are talking about using the force of law – that is my point. I don’t think that is really political (other than laws being passed by politicians).
I was referring to the “authoritarianism” comment, but I get your point. Good laws are good. Most people don’t want unreasonable laws or laws designed to benefit certain groups rather than contribute to the common good. I’m glad my neighborhood has a speed limit. We could debate whether it should be 20, 30, or 40 mph, but I’m pretty sure most of my neighbors think a limit is a good idea vs. allowing someone to race through the streets at 70 mph. Zoning restrictions can be good, though they can be politically manipulated. My understanding is the type of decorative building component that lead to the recent fire tragedy in England is prohibited by building codes here.
Good mandates are good. Most states mandate minimum auto liability limits (even though they’re not universally obeyed). There is debate about whether minimum liability coverage standards should be mandated…it doesn’t matter what limit was bought if a policy doesn’t cover most losses. Just food for thought. The execution of any standards would clearly be the tricky part.
On the insurability of flood:
https://www.andrewsriskadvisory.com/single-post/2017/06/18/Is-Flood-Really-an-Uninsurable-Cause-of-Loss-Under-Property-Policies
Another view:
http://insurancethoughtleadership.com/so-heres-an-idea-on-healthcare-reform/