For Health Insurance Exchanges to Work, We Must All Be Actuaries and Fortune Tellers

[eridani]

http://fdlaction.firedoglake.com/2011/05/23/for-health-insurance-exchanges-to-work-we-must-all-be-actuaries-and-fortune-tellers/

Everyone must be trained actuaries and insurance experts

Beyond just understanding all the complexity of these coverage plans, people will also need to figure out how they will work in the real world to determine the hidden costs. For example, a person could select an HMO they think is the best deal, only to realize they live on the edge of the HMO’s network, so in practice they will face the higher, out-of-network price or need to drive two hours to see the specialist they need.

Everyone must be fortune tellers

Even if we assume that most of these individuals with modest income (in the case of ACA) or most senior citizens (in the case of the Paul Ryan’s Medicare privatization plan) can fully understand all the different plans and how they will affect them specifically, it still won’t guarantee people make the “smart shopper” choice. To make the best choice, in addition to all that, they must also be able to accurately predict the future.

Even if you were a total expert on insurance policies but incorrectly assumed your probability of getting cancer is 1 in 10,000 instead of knowing it is actually 1 in 30, you would choose the wrong plan.

A market with a massive information imbalance won’t work

Making the problem even worse is the fact that insurance companies will have a profit incentive to make this already inherently complex system even harder for a person to understand.

Champions of private insurance exchanges rest their entire case for why this free-market magic will work on the absurd assumption that every middle-class American is secretly a Ph.D in the actuarial sciences.

[pnwmom]

1. Kind of sounds like life in general. n/t

[eridani]

2. If it is inevitable that we have useless profit-seeking parasites standing between--

--ourselves and our health care providers, why doesn't that happen in other developed countries?

[Mimosa]

3. I'm wondering how many Dems will be going along with privatising Medicare...

Good OP, Eridani! :)

[pnwmom]

4. Have you heard of any? I haven't. n/t

[eridani]

5. Not bloody likely. n/t

[eridani]

6. Revise that. If they do, it will be in a completely sneaky way.

They can't afford to do anything else.