whenever someone applies for health insurance, they have a chance of costing you more than the premium he's likely to pay. Now, if you reject all such candidates and only accept healthy people, then you'll be more profitable. In fact, the best thing you can do is to send such candidates to your competitors, because it makes them less profitable. So now you know why health insurance companies make you fill out all sorts of forms and have their doctors look at you to determine whether you're a good health risk. Note that even if you were a good-hearted CEO and wanted to insure all comers, you couldn't, because if you tried to do so, what would happen is this: all the people with health problems will come to your company to buy insurance because your policies cost less for them. That will drive up your costs, because those people cost more to insure. As a result, your insurance will cost more than your competitors and this will lead to a death spiral as all your healthy customers migrate to all your competitors, which will make your business more and more untenable.
Now, those of you with good middle class jobs will raise their hands and say, but wait, this doesn't happen to me. I have good health insurance through my job, despite my pre-existing conditions. That's because employers (especially large ones) can say to multiple insurance companies: "Hey, I've got a big group here. You either cover all of them, or I'll go to someone else. You can't take just my healthy employees --- you've got to take my unhealthy ones too." So what happens is that within a company, the healthier people subsidize the less healthy ones. This is as it should be, since even if your name is Lance Armstrong, there's no guarantee you won't come down with testicular cancer next year and need expensive treatment while in your 20s. If you're a really big company with large profits, you can go one step further and self-insure, and pay an insurance company only to deal with the paper-work, since that's how the medical industry does this.
The obvious next step then, is to put the entire population of a country into one big group, and have the country as a whole self-insure. This is how most major industrialized countries do it. Now you have a really big insurance pool, and you can insure everyone pretty cheaply! Now, if you've swallowed the Republican/Libertarian line about how the government is naturally wasteful, you'd be skeptical about this working out, and you'd be wrong. The government doesn't have to give its civil servants corporate jets, nor does it have an incentive to spend lots of time in court denying health-care claims to its citizens. So it can spend much more on health-care than on overhead. Note that the private insurance system has a built-in incentive to deny coverage whenever possible --- that savings go straight to the bottom-line of the insurance company. At the very least, politicians who want your vote have to keep you alive in order to get it, so this is definitely one case where the health insurance that covers everyone (through say, payroll taxes) at least does away with one perverse incentive.
Now, those of you with good middle class jobs will raise their hands and say, but wait, this doesn't happen to me. I have good health insurance through my job, despite my pre-existing conditions. That's because employers (especially large ones) can say to multiple insurance companies: "Hey, I've got a big group here. You either cover all of them, or I'll go to someone else. You can't take just my healthy employees --- you've got to take my unhealthy ones too." So what happens is that within a company, the healthier people subsidize the less healthy ones. This is as it should be, since even if your name is Lance Armstrong, there's no guarantee you won't come down with testicular cancer next year and need expensive treatment while in your 20s. If you're a really big company with large profits, you can go one step further and self-insure, and pay an insurance company only to deal with the paper-work, since that's how the medical industry does this.
The obvious next step then, is to put the entire population of a country into one big group, and have the country as a whole self-insure. This is how most major industrialized countries do it. Now you have a really big insurance pool, and you can insure everyone pretty cheaply! Now, if you've swallowed the Republican/Libertarian line about how the government is naturally wasteful, you'd be skeptical about this working out, and you'd be wrong. The government doesn't have to give its civil servants corporate jets, nor does it have an incentive to spend lots of time in court denying health-care claims to its citizens. So it can spend much more on health-care than on overhead. Note that the private insurance system has a built-in incentive to deny coverage whenever possible --- that savings go straight to the bottom-line of the insurance company. At the very least, politicians who want your vote have to keep you alive in order to get it, so this is definitely one case where the health insurance that covers everyone (through say, payroll taxes) at least does away with one perverse incentive.
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