Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP Posting-Version: version B 2.10.2 9/18/84; site amdahl.UUCP Path: utzoo!linus!philabs!prls!amdimage!amdcad!amdahl!ems From: ems@amdahl.UUCP (ems) Newsgroups: net.motss,net.med Subject: Re: Politics of AIDS, of Foster Care Message-ID: <2057@amdahl.UUCP> Date: Tue, 24-Sep-85 15:30:17 EDT Article-I.D.: amdahl.2057 Posted: Tue Sep 24 15:30:17 1985 Date-Received: Fri, 27-Sep-85 07:19:13 EDT References: <858@burl.UUCP> <1554@bbncca.ARPA> <865@burl.UUCP> <2034@amdahl.UUCP> <1290@ihlpg.UUCP> Organization: Circle C Shellfish Ranch, Shores-of-the-Pacific, Ca Lines: 67 Xref: linus net.motss:1820 net.med:2273 > > [E. Michael Smith] > > The problem: Insurance is a form of socialism. The purpose is to > > spread the costs generated by one individual over the whole group. > > ANY attempt to select out ANY higher risk subgroup is in conflict > > with the basic purpose of insurance. The inevitable result is a > > reduction in the cost sharing and a lessening of the 'insurance'. > > (Yes, I know there are differential rates based on various > > tables, charts, etc. The conflict still remains.) > --------- > Wrong. You are correct only if the higher risk subgroup is either > denied coverage completely or assigned to a separate insurance pool. > Differential rates (based on risk factors) within the same insurance > pool in no way lessens the effects of cost sharing. An insurance > company with a million customers could use so many risk factors > that no two customers pay the same rate. Please explain to me > how this adversely affects cost sharing. ... > Bill Tanenbaum - AT&T Bell Labs - Naperville IL ihnp4!ihlpg!tan In a very simple way. If I pay more than you do for insurance, then I have greater expense than you do. My costs are not perfectly shared. While it is true that in our present economy there are differential rates based on a variety of 'risk factors' and while it is true that most of the time the people paying more for coverage are still getting some sharing of costs; it is also true that the only time costs are perfectly shared is when all parties pay the same amount without regard to costs generated. Any thing else is a compromise. (This is probably a point that is not relevent to the real world, perfection is rare in it ...) BTW, I am confused by the statement '...correct only if ... assigned to a separate insurance pool.' It would seem to me that the act of segregating me into a different rate group *is* putting me into a separate insurance pool... Or are you saying that an insurance pool is a given asset base from which insurance can be paid? Let me try a different model for explaination. The purpose of insurance is to share cost, on that I think we have agreed. If all costs were summed, then shared equally, we would have perfect sharing. If all costs were summed, then divided equally by the number of people, then some people had costs deducted while others had costs added based on some 'risk factors', we would have imperfect sharing. (So far, so good, I hope ) At this point I claim that the imperfect sharing is a reduction of the 'insurance' by the amount extra that an individual must pay due to risk factors. Admitedly a very small amount compared to the potential magnetude of individual costs if one is totaly uninsured. The only way that I can see where this would not be true would be the following. If the definition of insurance is not taken to be the sharing of costs, but rather the substitution of *some known* fixed cost for some unknown variable cost. Then it would not matter that the costs were unequally shared. The only important point would be that there was a known rather than unknown cost. The known cost could vary by individual yet still be 'insurance'. However, the underlying mechanism by which insurance companies work depends on the sharing of costs over a large group, so I would hold the cost sharing definition to be the best on. (Sorry about the length of this. I hope that by making one long explaination of my position we can avoid several dozen rounds of missunderstandings...) -- E. Michael Smith ...!{hplabs,ihnp4,amd,nsc}!amdahl!ems This is the obligatory disclaimer of everything. (Including but not limited to: typos, spelling, diction, logic, and nuclear war) Brought to you by Super Global Mega Corp .com