Comments on: Home-Based Group Insurance

By: jimmy

jimmy — Sun, 19 Apr 2009 22:35:40 +0000

“people who are sick now find it hard to change jobs”

Why can’t the current employer pay the new employer to get the sick person off their hands?

By: Michael Honey

Michael Honey — Sun, 19 Apr 2009 11:01:38 +0000

Coming from Australia, I just don’t see why a national health coverage system is considered ‘socialist”: it’s just a pragmatic response to a universal need. We have private health insurance as well (the government encourages it through subsidies and tax breaks) but a universal system of health care, based on citizenship not employment status is, to most of the civilised world, one of the things that a society should just do.

By: Robin Hanson

Robin Hanson — Thu, 16 Apr 2009 20:52:44 +0000

Grant, yes, I’m not so much arguing for it as playing with the idea.

TGGP, yes, though usually one would think of moving away from corporations to local communities would be thought of as more progressive. All the more ironic that I’m accused of a free market bias here.

Dan you don’t understand the idea behind insurance.

By: Grant

Grant — Thu, 16 Apr 2009 17:35:24 +0000

Perhaps I’m missing something, but I believe Robin is trying to show the silliness of the status-quo (in America its employer-provided health care) by providing another, almost silly and random, mechanism that may work just as well. I don’t think he’s trying to defend neighborhood-based health insurance or employer-provided insurance.

Like many other policies, employer-provided care was the result of political action, but not of political design. I believe it emerged out of wage controls during WW2, and was politically impossible to remove. Defending it may be an example of status-quo bias.

By: TGGP

TGGP — Thu, 16 Apr 2009 14:13:44 +0000

Dan, insurance based on neighborhood is no more decentralized/marketized than based on employer. Robin's idea is an example of pulling the rope sideways.

By: Dan

Dan — Thu, 16 Apr 2009 12:05:03 +0000

botogol,

Yes steve has it right. Robin’s idea is the vegetable patch and goats in the backyard for healthcare…
The reason is because of his well known bias. A country system would be centralized and “socialism”. So he tries to decentralize and marketize it and at the other side a silly idea emerges.

By: botogol

botogol — Thu, 16 Apr 2009 10:48:41 +0000

steve has this right – why neighbourhoods? why not Cities, or States?

Or countries? the problem with socialised medicine is that in countries where it happened the state (for perfectly understandable and valid reasons) most often became the *provider* rather than the procurer of medical care.

If the NHS was invented in C21 it would undoubtedly be more like a compulsory insurance scheme, with competing private providers… as indeed it is slowly becoming.

By: Dan

Dan — Thu, 16 Apr 2009 10:38:16 +0000

This being Robin, I will assume that membership is completely voluntary… the groups is just going to exclude “high-risk” individuals by default. Not to mention poor neighborhoods will have pathetic systems if at all, the idea behind insurance is that the healthy pay for the unhealthy and the rich subsidize the poor(even in private plans). I don’t think a mild label as “biased” can be attached to Robin when it comes to financing health care, more like active rationalization and furious spinning… To be honest the idea is stupid… this is like saying we should replace the finance system with bartering because it is unregulated banks or no banks… What next, everybody should have vegetable patches and goats in their back yards?

By: Robin Hanson

Robin Hanson — Thu, 16 Apr 2009 07:36:01 +0000

Unnamed, people who are sick now find it hard to change jobs; being stuck to a home seems less of a problem than being stuck to a job.

Another, having group insurance customers be sorted does not at all imply adverse selection. Adverse selection requires the insured party to know more about its risk level than the insurance company, and that it choose to buy more insurance as a result.

By: Another Josh

Another Josh — Thu, 16 Apr 2009 03:53:03 +0000

Robin, you dismissed adverse selection out of hand. I see this as the overarching weakness to this system. I am incapable of reconciling your statements:

“Problems with . . . adverse selection . . . wouldn’t be obviously any better or worse under this proposal.” & “I expect home-based group plan buyers to be discriminating about who they let in, whether legal or not.”

If buyers are actively discriminating, neighborhoods will sort along wellness/sickness lines. I think they already do to an extent that would doom this system even if discrimination was effectively prohibited. Discrimination would only put the spurs to it.

You probably have a novel idea that I haven’t considered that may explain away this problem. I am eager to hear back from you.