Over at Economix Uwe Reinhardt writes:
Captain Renault was “shocked, shocked” to discover there was gambling at Rick’s Cafe in foggy Casablanca. (Watch Renault pocket his take.) Last week Congress was “shocked, shocked” to learn the estimated cost of universal health insurance was $1.6 trillion over a decade. (Policy wonks yawned.)
Then there was the mind-numbing $12 trillion Tab to Taxpayers after the casinos on Wall Street broke the banks. Call it shell shock.
Speaking of casinos. It seems to me actuarial health insurance can be compared to casino. This is because the odds always favour the house.
In the free market: Some people are healthy so they don’t buy insurance. Some are self-insured. Some are insured until they lose their jobs. Some are partly insured. Some are insured until their insurer deems them too sick to be insured. Some are too poor so Medicaid picks up the tab. Some are too old so Medicare picks up the tab. Some consider insurance premiums chump change. Some are happy with the insurance they’ve got. Some go bankrupt for medical reasons.
But the odds always favour the house. Everyone at some point needs medical care. Everyone at some point will get sick and die. So the casinos pay out enough claims to keep the players coming back.
Mind numbing.

Over at Economix Uwe Reinhardt writes:

Captain Renault was “shocked, shocked” to discover there was gambling at Rick’s Cafe in foggy Casablanca. (Watch Renault pocket his take.) Last week Congress was “shocked, shocked” to learn the estimated cost of universal health insurance was $1.6 trillion over a decade. (Policy wonks yawned.)

Then there’s the mind-numbing $12 trillion Tab to Taxpayers after the Wall Street casinos broke the banks. Call that shell shock.

Speaking of casinos. Private health insurance can be compared to casino. This is because the odds always favour the house.

In the free market:  Some people are healthy so they don’t buy insurance. Some are self-insured. Some are insured until they lose their job. Some are partially-insured due to pre-existing conditions. Some are insured until their insurer deems them too sick to be insured. Some are too poor so Medicaid picks up the tab. Some are too old so Medicare picks up the tab. Some are happy with their insurance. Some consider the cost of health insurance chump change. Some go bankrupt.

Everyone is trying to game the system. But the odds always favour the house. It always looks easy at the movies. (Check out Dance in Hall of Angels.) But everyone at some point needs medical care. Everyone at some point will get sick and die. So the health insurance casinos pay out enough claims to keep the players coming back. Mind numbing.

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June 2009

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