Ezra Klein: Unbelievable

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January 08, 2007

Unbelievable

From Lisa Girion's story on insurance underwriting (which I say more about at Tapped), here's a list of jobs which will lead major insurers in California to simply refuse to offer you coverage -- at any price:

Air traffic control

Building, moving

Chemical/rubber manufacturing

Circus or carnival work

Concrete or asphalt work

Crop dusting

Firefighting

Furniture and fixtures manufacturing

Lumber work, including wood chopping, timber cutting and working in a sawmill

Migrant labor

Oil well or refinery work

Police work

Roofing

Sandblasting

Sports, semi-pro or professional

Stockyard work, with or without butchering

Stables, all employees

Stunt work

Telecom installation

Transportation and aviation

Tree climbing

Tunnel work

War reporting

Window work at heights exceeding three stories

One wonders if making a living doing telecom installation, or roofing, or window cleaning, or lumber work, or construction is really so sinful that we think it acceptable for our health system to deny such workers health coverage.

January 8, 2007 in Insurance | Permalink

Comments

This is the basic flaw in the pure "market-based insurance system" theory of health care. Competition in insurance has little innovative power. Advances in actuarial practice do occur, but they tend to be mostly connected to advances in statistical analysis generally and thus don't provide much competitive advantage.

Hence, the competitive advantage of insurers boils down to only a few things:

a) Generalised administration efficiency (lower overheads)

b) Branding (which allows you to charge more)

c) Ability to avoid paying for treatments insured for. (More profit, but a tricky balance with customer satisfaction.)

d) Avoiding high risk groups or "cream skimming."

This is cream skimming in action. The killer is the "at any price" bit. The reason for it is that healthcare is not "just another commodity," it has strange elasticity curves (and a lack of substitutes) which disrupt the usual tools of market analysis.

There's more to say, but I think you address the consequences well in your TAPPED post.

Posted by: Meh | Jan 8, 2007 12:59:46 PM

Well, some of those jobs can get insurance through their employer/union, right? Like, I imagine anyone in a construction trade, or any public servant (police/fire) is insured through their union. Heck, even the stunt men might be. Though obviously not all construction workers are unionized.

So, the real travesties are the farm work, windows, and of course war reporting.

Posted by: Nicholas Beaudrot | Jan 8, 2007 1:16:34 PM

The insurers are only making intelligent use of actuarial tables.

The crime is that it's legal.

Posted by: Petey | Jan 8, 2007 1:21:42 PM

Air traffic control? What the heck is dangerous about that? The sleep patterns? It's not like planes crash into and burn down control towers.

Posted by: Cryptic Ned | Jan 8, 2007 1:28:47 PM

"Well, some of those jobs can get insurance through their employer/union, right?"

If so, then if the NFL etc won't insure you, I can somewhat understand orivate insurers refusing to. That might be part of the mechanism at work here, that group plans are available to some of these people. But probably not most.

"The crime is that it's legal."

I really don't think you should or can force a private business to operate at a loss by law.

Stoller calls it "murder by spreadsheet" I happen to like that level of rhetoric, because we need UHC NOW; because the biggest obstacle are the private insurers;because we can't fit them in to any reasonable system without simply subsidizing them and increasing overall costs. (although they might fit outside and around the margins, but without governmental connections.)

Private insurance has to go. We threaten them with extinction...and then, maybe, negotiate.

Posted by: bob mcmanus | Jan 8, 2007 1:32:36 PM

Health insurance is really for those who don't need it, as viewed by the insurance companies.

I think Bob McManus is correct. But we will have to do more than threaten extinction.

We can also prepare to make their life miserable if they don't go along:

- Mandatory Fed laws that require all policies be statewide-community rated - or even better nationwide-community rated (national risk pool).

- Jail terms for insurance executives that deny coverage to their insured if the disease/treatment is on a Federal list of things which must be covered.

- A federal entity that would compete with the insurance companies (like Fanny Mae) and use nationwide risk pooling, and that must be offered in each state as an alternative for consumers.

- Make it illegal for companies to write off expenses of lobbying/contributions from trade associations (like Pharma).

Some industries have to die when progress is made. Horse-buggy makers and horse-whip makers were not protected from change. As long as we make the insurance companies think we aren't serious about major change (including eliminating their business), they will think they are protected.

Posted by: JimPortlandOR | Jan 8, 2007 1:53:42 PM

so sinful

What kind of underwriting are we talking about here? Indulgences?

Posted by: Sanpete | Jan 8, 2007 2:21:55 PM

Attempting to issue insurance coverage at an individual level is just completely borked regardless of the insurance companies' motivations. The money to pay for sick peoples' claims has to come from somewhere, usually from the premiums of healthy people - but there aren't enough healthy people buying individual insurance for that to cover it. A large part of the reason these healthy people aren't buying individual insurance (i.e. go uninsured) is because the premiums are so high, compounding the original problem. This is the infamous adverse selection death spiral, and individual health insurance is a textook example of it in action.

As for threatening the companies with extinction - most of these companies already contract with the government to administer existing healthcare programs like Tricare and Medicare. If the government does the intelligent thing and becomes the primary insurer in the country, it'll have a helluva lot of new administration to be handled - which will most likely be farmed out to companies that already have a lot of experience in handling healthcare eligibility and claims. The insurance companies are being threatened with a massive refocusing of their business, not outright extinction.

Posted by: Kylroy | Jan 8, 2007 2:28:10 PM

"What kind of underwriting are we talking about here? Indulgences?"

Many people pooh-pooh universal coverage as a government subsidy to smokers and fatties. Why, if you live a virtuous, low-fat and excersize rich life, you won't get sick. Just ask Jim Fixx.

What this list illustrates is that the focus of underwriting is not virtue, but profits. And people in many occupations necessary to society (we could live without semi-pro sports and stuntmen, but construction and logging are definitely needed) are shut out of the current system. While some or even many of them may get group coverage, the glimpse into the id of the insurance industry this list provides us is a reminder that, if they could, insurers would drop anyone who ever claimed anything.

Posted by: Kylroy | Jan 8, 2007 2:36:03 PM

> Air traffic control? What the heck is
> dangerous about that? The sleep patterns?
> It's not like planes crash into and burn
> down control towers.

Very high ulcer, heart disease, and PSTD-like-syndrome rates. Similar to other high-stress, rotating-schedule jobs (e.g. power plant operator).

Cranky

Posted by: Cranky Observer | Jan 8, 2007 2:55:36 PM

This si why the very nature of health insurance is evil. Please, spare me the "they're a business and need to make money" argument. It is the very desire to better yourself at the expense of others that defines evil. The people who run health insurance are evil men, and I wouldn't mourn a day if theydied or their loved ones did. The wicked should suffer, for they make sure the good do.

Posted by: Soullite | Jan 8, 2007 3:23:38 PM

Kylroy, universal coverage and underwriting are independent issues.

It is the very desire to better yourself at the expense of others that defines evil.

So competition = evil, Soullite?

The people who run health insurance are evil men, and I wouldn't mourn a day if theydied or their loved ones did. The wicked should suffer, for they make sure the good do.

This attitude seems evil to me. The insurance people I've known have more humanity than you seem to, just judging from your post, though I'm guessing this isn't representative of your whole soul.

Posted by: Sanpete | Jan 8, 2007 3:34:46 PM

But... but... but... supply and demand curves! Market pressure! Econ 101!!!

Posted by: NBarnes | Jan 8, 2007 3:45:07 PM

Hemmm Cranky,

Seems you must be guessing. Ulcers are caused by H. Pilori, a bacteria, not having large aluminium tubes flying at high speed towards each other.

Since most of the Air Traffic people are government employees they have little need for outside insurance. I would suggest that none of this makes any sense and the data that Air Traffic Controllers are high risk is nonsense. I think they are on the list in error.

For what is it worth I know a lot about ATC and even more what it is worth, my son is one.

DrJohn

Posted by: DrJohn | Jan 8, 2007 3:52:41 PM

Not sure what kind of doctor you are, DrJohn, but ulcers have more causes than H. pilori. And they are associated with high stress, which air traffic control is famous for. High stress is also associated with high blood pressure and other problems. But there's no need to guess the general reason air traffic controllers are on the list. It's because studies, including ones internal to the insurance companies, show them to be at high risk for expensive claims. Doesn't surprise me at all. Best wishes for your son, regardless.

Posted by: Sanpete | Jan 8, 2007 4:16:39 PM

H. pylori, that should be.

Posted by: Sanpete | Jan 8, 2007 4:18:13 PM

"I would suggest that none of this makes any sense and the data that Air Traffic Controllers are high risk is nonsense."

We are not dealing in the realm of causatory logic. We are dealing in the realm of actuarial tables.

If the tables show ATC's to be a bad risk, no logical justification is necessary.

Again, the insurers are just doing their jobs. The crime is that it's legal.

Posted by: Petey | Jan 8, 2007 4:21:46 PM

"Kylroy, universal coverage and underwriting are independent issues."

Actually, they're very closely related. Absent universal coverage, you have underwriting to decide who does and does not get covered by a health insurance policy (or what the rates for that policy will be). And with healthy people opting out, you enter the adverse selection death spiral that got us where individual insurance is today. Forbidding certain types of underwriting exclusions won't eliminate the underlying problem - the money to pay sick people's claims has to come from somewhere. And if only sick people are signing up, it's going to come from insanely high premiums.

Group plans get healthy people to join by paying most of the cost for them and not offering them the alternative of a cash payout. National health care just drafts everyone into the same risk pool. I don't really see an objection to national health care that doesn't also apply to employer health care - if it's wrong to have your money support an overweight, hard-drinking fellow citizen, why is it OK to have that money support an overweight, hard-drinking coworker?

Posted by: Kylroy | Jan 8, 2007 4:31:18 PM

Kylroy, even with universal coverage you can have underwriting. Maybe you're thinking of community rating rather than universal coverage?

As I see it, universal coverage and community rating are both compatible with incentives for healthy behavior (beyond the ones that inhere in good health). Underwriting isn't the only way to provide incentives.

Posted by: Sanpete | Jan 8, 2007 4:54:00 PM

You got about 99 percent of the way to the cupie doll, Sanpete. Actually, in a perfect health insurance world, you need BOTH universal coverage and community rating. The beauty of it is, if you have both of those, you don't even need the government as single payor. You can have a multi-payor, private-sector-administered system as long as it is carefully regulated, much the way utilities are.

Posted by: Rick | Jan 8, 2007 5:14:37 PM

Kilroy said "The people who run health insurance are evil men, and I wouldn't mourn a day if theydied or their loved ones did. The wicked should suffer, for they make sure the good do."

Sanpete said "This attitude seems evil to me. The insurance people I've known have more humanity than you seem to, just judging from your post, though I'm guessing this isn't representative of your whole soul."

How bout this instead? The people who make a living by better determining who will be killed or maimed by disease or injury in the absence of health care, and then denying them access to that health care, regularly perform an immoral act. Their actions result in death and suffering. They undertake them because they enable them to make money.

Better said?

Posted by: RW | Jan 8, 2007 5:37:30 PM

Not the cupie doll I was trying for, Rick, but you may be right.

RW, it was Soullite who made your first quote. Your version is better, but it still depends on some controversial assumptions about morality and other things, some of which I'm not so sure of.

Posted by: Sanpete | Jan 8, 2007 6:05:38 PM

Drat! Can't seem to get my posters names right.

What controversial moral assumptions do you detect?

Posted by: RW | Jan 8, 2007 6:10:12 PM

What controversial moral assumptions do you detect?

There's the assumption that underwriters (and their insurance colleagues) determine who will be killed or maimed by disease in the absence of health care. The insurers decide whether they'll pay, but they don't directly decide who will get care. In a way, we all decide that, in that we could vote to pay. (And we often do pay, as it happens.)

There's also the assumption, it seems, that the insurers are morally responsible here. Usually in a free market we don't assign moral blame that way.

Posted by: Sanpete | Jan 8, 2007 7:29:02 PM

what does a free market have to do with the insurance industry? especialy since free markets can not exist in practice. Further why shouldn't we assign moral blame even if a free market were possible. The insurers make a moral choice whether they want to admit or not.

Posted by: BillCross | Jan 8, 2007 8:59:21 PM

Bill, we usually don't assign moral blame to a seller for refusing to sell at a price we can afford. Why is it a moral choice for the insurer but for, say, you? Do you volunteer to pay for the care of others the insurers refuse to pay for? You could.

Posted by: Sanpete | Jan 8, 2007 9:32:10 PM

That would be "but not for, say, you?"

Posted by: Sanpete | Jan 8, 2007 9:34:18 PM

Sanpete--

A number of morally reprehensible acts are performed within insurnace companies. I will confine myself to the one forming the basis of this thread -- creating sophisticated measures of the likelihood of illness or injury for the purpose of excluding people from coverage.

On an individual level, every person who undertakes this conduct gets up every day and makes a choice. They could better refine their measures to exclude people who are likely to need health care, or they could choose not to. Choosing to do so is profitable but results in death and injury; choosing not to do so would do the opposite. For these people as individuals, there is no act/omission distinction -- plying sophisticated mathematical techniques to exclude the sick is not a passive enterprise.

Nor can any reasonable objection be made that the actor himself does not cause death or injury, because illness or injury occurs after the decision is made. Aggregated over the course of their activity, death and illness are virtual certainties. Yes, a germ or other instrumentality of an injury must intervene before someone is actually killed or maimed. But this has no more relevance to the actor's culpability than it would to a person who is paid to remove surgical tools from the hands of a physician.

Nor should we accord any relevance to the fact that a hospital or other health care provider must subsequently choose to deny care in the absence of insurance coverage before injury or death is sustained. Two parties can share moral responsibility for the same consequence. Further, the hospital and provider could conceivably be rendered incapable of providing health care if they provided health care without charge. Creating more sophisticated measures to exclude the sick and injured
is not essential to either health care or health insurance.

Your defense of the morality of the industry as a whole is similarly misguided. The analogy to an ordinary vendor refusing to sell products at an affordable price is not compelling for a number of reasons.

First, the health insurance industry sells life and health. These are not ordinary products. To say that health insurers are simply leaving people in the condition in which they found them is to say that persons afflicted with disease or injury appropriately bear the entirety of the cost because of the morally arbitrary fact that the disease or injury happened to occur in their bodies. Discriminating against people because they are sick or disabled is particularly offensive because it undertakes to make life worse not in spite of, but because of, the fact that the target is already suffering. In this respect, it is as offensive as a private college denying an african american admission to the school on the basis of race -- african americans already bear the arbitrary costs of racial discrimination, and further discrimination on the basis of race treats the prior cause of their suffering as an appropriate basis for shame and disadvantage. It is, in a moral sense, nihilistic. Governmental regimes that discriminate on the basis of health have been some of the world's most despicable, and the same principle is no more acceptable when it is reproduced writ large in the private sector.

Second, and probably more importantly, health insurance is not merely a mechanism by which individuals obtain life saving treatment -- it is the PRIMARY mechanism by which individuals obtain life saving treatment. The existence of this industry displaces every other risk spreading tool. Each time an offer of health insurance is made to a healthy person alone, it becomes more difficult for a sick or injured person (or a person likely to become sick or injured) to get coverage, because there are fewer people with whom to share risk. This aspect of the industry is rendered all the more reprehensible by the fact that it actively lobbies to prevent reforms that would make it possible for uncovered sick and injured people to get coverage.

Imagine a situation where a landowner had access to a single source of drinking water for a discrete population. If she chose to do nothing, the next landowner down the stream would sell the water. If she chose to simply bottle the water in its natural form and sell it, she would make a decent living, and the water would be life-sustaining. Suppose, instead, she found a technological mechanism to separate clean from dirty water, so that the clean water was delicious, health promoting, and life sustaining, while the dirty water was barely adequate to clean the body and caused disease. Would she be justified in applying the technological innovation and then "refusing to sell (the clean water) at a price we can afford?" Assuming that it were profitable to do so, would it not be immoral to sell the healthy water only to people who were healthy to begin with? And even if you believe that the landowner's enterprise were justified, what about the person who was employed for the sole reason of better refining the mechanism that separated clean from dirty water? Surely THAT person's actions are subject to moral censure.

Third, and relatedly, the insurance industry really offers no benefit to society over the system that would occur in its absence. Society would pool resources and pay for health care in the absence of private insurance -- every other society capable of doing so has done so. Soceity would do so more efficiently and would provide health care to more people. Every person that dies under the private insurance regime that would live under single payer is the moral responsibility of the insurance industry.

It is or was possible to sell light arms, asbestos, and cigarettes in the free market and turn a profit. But its still a guy (or woman) in an office making decisions that kill in exchange for money, and its wrong.

As for your friends, there are a lot of people who probably perform tasks for the industry that are easily replaced and which do not substantially contribute to the harm they inflict. And there are some who have reflcted on the morality of their acts down to their soul and actually believe it is ok. In my opinion, though, all of them live on blood money. Its ok, a lot of decent people do.

Posted by: RW | Jan 9, 2007 11:32:20 AM

RW, what you still don't show is that the insurers are responsible for these deaths and untreated illnesses. That their exclusions are active rather than passive has nothing to do with it, to my way of thinking. If someone dies from an under-treated medical condition that an insurer refused to cover, her neighbors, care providers and we also refused to pay. We know that people die from lack of care. We could pay. Why should the insurer be the one held responsible?

If you were arguing that sometimes insurers deny coverage dishonestly, that would get no argument from me. That's immoral. That the industry lobbies against reforms might also be faulted. But you're arguing that the normal course of insurance practice is immoral, when it's exactly the way it has to be to have private insurance under current law. Sure, insurers could stop trying to figure out who will cost more than they pay in, and promptly go out of business--that reality you point to of being unable to provide service without adequate pay applies just as well to insurers as care providers. If high-risk people were willing to pay enough, they would of course be able to buy insurance--they're excluded in practice because there's little advantage to them in buying insurance at what would be market rates. There is no "discrimination" against high-risk people in the sense that there was historically in race relations. They just can't afford what they need. As Petey more or less said, it's the system as a whole, not the insurers, which is immoral here.

The insurance industry doesn't sell life and health. They sell money to pay for it. That money could just as well come from somewhere else, like you and me. Insurers don't own the single source.

Third, and relatedly, the insurance industry really offers no benefit to society over the system that would occur in its absence.

This is debatable. In theory a variety of insurers should make a wider variety of plans available, with different motivations for innovation and good service than typically arise in a government setting. That's if the market is properly structured by laws.

In my opinion, though, all of them live on blood money.

As do you and I. We could all use our money in ways that would more effectively prevent death and suffering.

Posted by: Sanpete | Jan 9, 2007 1:56:05 PM

Person A is ill. Person B is healthy. It is impossible for Person A to get health coverage unless Person B agrees to do it with him. Person B is willing to purchase health coverage with Person A if the alternative is not having coverage, but would prefer to buy it alone. Resignation underwriters, inc. offers the two of them a package together at a price both can afford. Fuckyouuptheassunderwriters, Inc. (FYUTAUW, Inc.) offers health insurance to Person B individually, who accepts the package. Person A dies of uninsurance (See my response to Toke on History Lesson for evidence that uninsurance causes death).

FYUTAUW is responsible for the death of A. Their conduct was a but for cause of A's death -- A would not have died but for their behavior. The act/omission distinction offers no refuge -- they actively solicted the membership of B. In that sense, and in the sense of their capacity to alter the outcome, they were more responsible for the death of A than A's neighbors, who, likely, did not amass premiums sufficient to pay for A's care. If FYUATAUW is not responsible for the death of A, it can only be because the costs (biological and financial) of A's illness are properly borne only by A. Assuming A's illness was not the result of his behavior (or that comparable behavior is regularly engaged in by B without consequence, or, that like the motherf*cking FIREFIGHTERS who are uninsurable in the private market, A incurred the illness because of virtuous activity) I dont believe this is a morally defensible position.

In other words, FYUATAUW's acts have killed A, and A did not deserve to die.

Nor is it any good objection that resignation underwriters does not, in fact, exist in our society. Put aside the insurance industry's EXTENSIVE lobbying efforts to defeat health care reform. There is still the reality that if no insurance company offered packages solely to the healthy, all would offer packages to both healthy and unhealthy alike. To excuse FYUATAUW's conduct merely because all insurance companies behaved like it did woud justify selling cigarettes, asbestos, or light arms during periods in which these items were actively traded. In other words, pointing to the universally despicable practices of the industry represents a very poor defense of it.

No meaningful distinction can be drawn between an immoral health care system and the immorality of the health insurance industry. Private insurance is the system, and everybody involved in it is responsible for the blood it sheds.

Posted by: RW | Jan 9, 2007 7:05:46 PM

RW, even if your example were realistic (it isn't entirely, as you seem to recognize further down), why wouldn't person B be just as guilty as the insurer? A wouldn't have died except for B's active choice not to subsidize A's premiums by paying higher premiums into a risk pool with A in it. And why aren't you and I just as responsible, since A wouldn't have died except for our continuing failure to sufficiently insure that no person lacks health care? (Again, no one dies of uninsurance any more than they die from un-you-paying-for-their-care-directly.) You mention the insurer's active solicitation of B as though that's the most guilty thing, but I don't see why. It really depends on this kind of thing:

If FYUATAUW is not responsible for the death of A, it can only be because the costs (biological and financial) of A's illness are properly borne only by A.

No, it's because in our system the insurer isn't charged with any special responsibility to cover the unprofitable. The insurer is charged with standing by their contracts in good faith. Who the responsibility for A lies with, if anyone in particular besides A, is a further matter. I don't think of it in these terms, myself. I care about A and want him covered, and I'm willing to chip in and make others chip in. The morality of it doesn't really come up directly in my thinking about it. It comes up indirectly in defending my decision against objections that it's immoral.

Nor is it any good objection that resignation underwriters does not, in fact, exist in our society.

It's a good objection that they cannot exist as a for-profit entity. As long as the law enables insurers to cherry pick, they will have to do so to exist.

That includes us. I'd be interested in knowing why the insurance industry bothers you so much more than all the other responsible players, including you and me.

Posted by: Sanpete | Jan 9, 2007 8:41:58 PM

Sanpete

You ask "why wouldn't person B be just as guilty as the insurer? A wouldn't have died except for B's active choice not to subsidize A's premiums by paying higher premiums into a risk pool with A in it. And why aren't you and I just as responsible, since A wouldn't have died except for our continuing failure to sufficiently insure that no person lacks health care?"

Distinction 1: If you and I never existed, A would still die. If B never existed, A would still die. Only FYUTAUW's existence makes A's life any shorter.

Yes, there is more than one company around to attract B. The hypothetical is an indictment of the industry as a whole, not any one particular company -- if the industry did not engage in cherry picking, another industry that made money by accepting everyone would arise. The legality of cherry picking is a necessary but not sufficient cause of uninsurance. In a world where cherry picking is legal, the industry's decision to cherry pick is a necessary and sufficient cause of uninsurance.

In any case, the fact that another company would cause A's death through the exact same practice does not excuse FYUATAUW's behavior. Do you excuse the behavior of Owen's Corning because if they hadn't sold the asbestos that caused mesothelioma to a particular work-site, another company would have? Do you excuse Phillip Morris because if they didn't sell a lung cancer victim Marlboro's, he probably would have smoked Camels?

Note everything that is being bracketed here -- we aren't evaluating 1) marginal improvements in risk screening that increase profits, increase death, but are not individually necessary to save the company from bankruptcy 2) fraudulent activity or 3) lobbying to stave off health care reform.

You also say, "I care about A and want him covered, and I'm willing to chip in and make others chip in." I know you do. You seem like an eminently decent person.

Posted by: RW | Jan 10, 2007 11:21:31 AM

I said "Nor is it any good objection that resignation underwriters does not, in fact, exist in our society."

You responded "It's a good objection that they cannot exist as a for-profit entity. As long as the law enables insurers to cherry pick, they will have to do so to exist."

They can exist as a for-profit enterprise, as long as FYUTAUW is not around to suck up all the healthy enrollees. Insurance companies sell group policies to businesses that have both sick and healthy participants all the time. The premiums are higher, but they still make money. Not as much, but they still make a profit.

Posted by: RW | Jan 10, 2007 11:27:48 AM

Only FYUTAUW's existence makes A's life any shorter.

Please explain. Seems to me that if that insurer never existed, A would have died just the same as if B or we or others who could have helped never lived. Can't see the distinction.

In a world where cherry picking is legal, the industry's decision to cherry pick is a necessary and sufficient cause of uninsurance.

No, we could provide it.

the fact that another company would cause A's death through the exact same practice does not excuse FYUATAUW's behavior.

Your example didn't show that any company caused A's death, any more than we did. You would have to show that some company was obligated or supposed to prevent his death more than others, including us, were. You haven't done that. The analogy to companies who, by selling something, do take on responsibility for their product's effects, doesn't apply to a company who simply doesn't sell something at a loss to someone who had no right to get it from them.

Group policies through employers typically work for insurers because the employees don't pay the full premiums (at least not in a way they notice). That won't work in contexts where the insured pay the whole premium and at least half the pool can do better by leaving the pool. The basic point remains: in our system insurers aren't required to cover anyone, no more than you and I are required to. They do it when it's profitable in a competitive market. Otherwise they go out of business.

Posted by: Sanpete | Jan 10, 2007 3:45:41 PM

"Please explain. Seems to me that if that insurer never existed, A would have died just the same as if B or we or others who could have helped never lived."

In the hypo: if FYUTAUW never existed, resignation underwriters would sell a policy to both of them.

In the real world: if no insurance company sold policies solely to the healthy, it would be possible and profitable to sell group policies to healthy and unhealthy alike.

Irrespective of whether or not you agree, are you with me?

Posted by: RW | Jan 10, 2007 4:14:11 PM

In the hypo: if FYUTAUW never existed, resignation underwriters would sell a policy to both of them.

I see, but B's choice also makes A's life shorter, as does your and my choice, just as much as the insurer's choice does. The insurer's choice doesn't shorten A's life any more than the others. I still don't see how your point shows that the insurer was the guilty party. The issue, as I see it, hangs on who is responsible, if anyone, for paying for A's care.

Posted by: Sanpete | Jan 10, 2007 4:51:07 PM

Your objection is that you reject that test -- whether the victim would be in as serious a condition in a world where the actor under scrutiny did not exist -- as a means to distinguish between people who bear moral responsibility for the death of another?

Do you think that we bear moral responsibility for the death of the uninsured, even if we dont know them and nothing in our lives especially brings them to our attention? It's a defensible position if you do (think religion), but certainly not one that excuses a company that not only does nothing, but actively inserts itself in the health care industry, and spends hundreds of thousands of dollars for no other reason than to make sure it is not accidentally paying for sick people's health care.

Posted by: RW | Jan 10, 2007 5:28:33 PM

RW, I don't see why that would be a good test of moral responsibility. It matters why the insurer does what it does, who is responsible normally, etc.

I don't think there's a widely enough shared moral framework that would say whether we bear moral responsibility for those we don't know, and I don't see much point to me asserting one that isn't shared. I do favor such responsibility and think we'd be better off if we did have that moral framework.

spends hundreds of thousands of dollars for no other reason than to make sure it is not accidentally paying for sick people's health care.

That isn't why they do it, though. They spend that money so they can make enough in a competitive market to actually pay for the care of those who can afford the insurance and still make a profit. They do provide a service, one that's affordable because they underwrite. A just couldn't afford it. If that bothers you, as it appears to, you and I should both try to change the system, but I don't think that is helped by assigning blame where it isn't plain it belongs.

Posted by: Sanpete | Jan 10, 2007 6:48:15 PM

one that's affordable because they underwrite

Well, affordable for most (it being a relative thing).

Posted by: Sanpete | Jan 10, 2007 6:52:20 PM

I think assigning blame to insurance companies actually does catalyze change. And making excuses for them retards change.

It seems to me that you are conflating legal and moral responsibilities.

Posted by: RW | Jan 10, 2007 6:57:19 PM

How does it catalyze change to blame the underwriters, rather than the system? It's the system that needs to change. Underwriting won't be affected by criticism. It has to be legally excluded or superceded.

I recognize the difference between legal and moral responsibility, but what is legal does have relevance.

Posted by: Sanpete | Jan 10, 2007 7:03:52 PM

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