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):
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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