Why is it not fair for an insurance company to charge you a higher premium if you are leading a lifestyle that statistically makes you more likely to have health problems?
I think on a principled level, many are becoming concerned about the ever increasing volume of data being collected on all of us. It isn't necessarily about any particular subset of data, or all the plausible abuses of it, it's just the idea that some would rather not have every move they make being recorded and logged into a system they have no information on or ability to influence.
More specific to insurance companies, the potential/plausible abuses to increase profit don't take much effort to ferret out. And to make matters worse the data they use will invariable flag a lot of false positives that you'll have little to no way of fixing. For example, my girlfriend regularly picks me up a pack of cigarettes on her way home from work. She usually uses her credit card instead of cash. Ok, now she's flagged in the system as being a chronic smoker and her rates get jacked up to holy hell. Except, of course, she's not actually a smoker and I'd be super skeptical about her ability to reasonably explain this to some random customer service rep over the telephone.
Data mining usage habits rarely result in lower prices for people making positive, less risky choices. Non-smokers will probably be giving a trivial token discount, but unlikely anything more.
Data mining usage habits rarely result in lower prices for people making positive, less risky choices.
This is because we live in an inflationary economy. Most prices go up. As a healthy guy, I'd like the price increases to be inflicted on the fattie smokers rather than me.
Not that it really matters in the context of health insurance - the laws surrounding it are structured in such a way as to subsidize the fattie smokers at the expense of healthy gym guy, regardless of what info the insurance company has (and they will become worse in a couple of years, unless the supreme court stops it - good luck with that).
Because those habits are associated with lower income and education levels. An increase in expenses is the last thing someone on the brink of financial ruin needs, and advocating for such seems to show a lack of empathy.
If someone is on the brink of financial ruin, they should stop wasting money on cigarettes and excess food. That will improve both their health and their financial situation.
To describe such a person as "vulnerable" is a little silly. Their vulnerability is something they created themselves.
Tell me. Have you ever been on the brink of financial ruin? When life seems bleak, rationality becomes incredibly remote. You'll burn through all your mental willpower just stressing about how you're going to pay enough of your bills to keep the utilities running. Cheap, high-calorie food and other time wasters typically avoided by the more financially able become essential escapes from the misery of baseline existence. They become the only way to stay sane.
If you want people to stop eating fast food and watching TV all day, give them something more to live for than their next junk food hit instead of making their continued survival even more uncertain.
I guess I disagree - I don't think that people with "lower income and education levels" are mentally incompetent and unable to manage their own lives.
I think they merely have different utility functions than me, and assign a lower value to health, but a higher value to leisure. And I'd argue they have the right to continue eating chips and watching TV - they just don't have the right to force other people to pay for their choices.
But lets take your theory of mental incompetence seriously - in that case, isn't the solution some sort of institutionalization? I.e., assign some bureaucrat to make good choices for them, rather than merely forcing responsible adults to pay for their irrational bad choices?
I didn't say they're mentally incompetent. I said that the state of being poor imposes such a high mental cost that even the intelligent poor struggle to apply their intelligence consistently. Even if we assume (incorrectly) that poor people are exclusively those on the left half of the intelligence distribution, the answer to their problems isn't charging them more money, thus making their problems generational because they can't afford the education, nutrition, and childcare necessary to end the cycle of ignorance. The answer lies in making a positive life more appealing, e.g. by making healthy foods more affordable, more available, and tastier; improving access to education (MITx/edX/Khan Academy/etc.); making education and societal contribution more culturally appealing through changes in entertainment and early education; etc.
It's probably worth mentioning the philosophy that drives my opinions on these issues. I want to minimize individual and total human suffering while maximizing individual and total human potential. In other words, I believe that every human being should have the right not to suffer, along with the opportunity to make their best contribution to the progress of humanity. Being poor and trapped by the mental stresses of staying alive leads to suffering, fast food temporarily alleviates that suffering, and increasing the cost of health insurance will exacerbate that suffering. I still care even if it's someone else suffering while I enjoy the money I might save each month by not paying for their lifestyle.
I said that the state of being poor imposes such a high mental cost that even the intelligent poor struggle to apply their intelligence consistently...I believe that every human being should have the right not to suffer, along with the opportunity to make their best contribution to the progress of humanity.
You seem to want to have it both ways. Either the poor are adults capable of making their own choices, or they aren't.
If they are mentally competent, they have the right not to "suffer" ("suffering" isn't the word I'd normally use to describe a life of leisure). They just choose not to exercise it.
Your definition of competence seems to differ significantly from mine. For one thing, there's not some binary threshold of competence vs. incompetence. What I'm describing is a temporary condition caused by depletion of mental willpower. You also seem to be applying a degree of the typical mind fallacy. Maybe you are the ubermensch incarnate and could maintain total control of your creative mental faculties through the most painful torture, but most people have limits. That doesn't make them incompetent; it just makes them human.
Maybe you are the ubermensch incarnate and could maintain total control of your creative mental faculties through the most painful torture...
Hardly. I certainly wouldn't hold a person being tortured responsible for their actions, but I also wouldn't permit them to make their own decisions.
My position is that the right to make a choice and the responsibility for that choice go hand in hand. Either the poor are allowed to make choices and suffer the consequences, or they aren't. If you'd like shades of grey, perhaps they could jointly make decisions with a guardian, and the guardian is partially responsible for those choices.
I take exception to the example of invisibly raising of insurance prices as a result of unannounced data mining. It's entirely unfair to hold people to standards they aren't told about in advance.
I'm less opposed to directly increasing cigarette taxes than I am to secretly raising insurance prices for people whose credit card statements include fast food. At least the cigarette price is visible up front, and the health risks of smoking are well understood. On the other hand, television constantly bombards its viewers with irresistible portrayals of people enjoying their products, with no up front indication that regular consumption of these products will (as hypothesized by the original article) put a black mark on your reputation that only corporations can see.
You're dismayed that some people believe the unhealthiest of the population ought to pay the largest share of healthcare costs? Maybe you disagree, but "dismayed" seems very harsh.
Mainly healthcare prices, education and some classes of real estate go up. Those are extremely rent-sought markets, not subject to competitive forces. And inflation is now running less than the 2% Fed target ( including the things mentioned above ). The "fatty smokers" are a rhetorical lightning rod, and hardly a threat to your way of life. Meanwhile healthy gym guy runs up a sports medicine bill.... the emphasis on "fitness" began with John Kennedy, designed to increase the fitness of draftees, and has gone mad-cow viral since ( especially when they figured out you'd pay $100 for a $5 pair of shoes in the 1980s... )
Insurance theoretically spreads risk and operates on laws of large numbers -- in other words, the company is betting that if 500,000 people buy this policy, statistically it will only pay out on a relatively small number of them, thus covering operating expenses and turning a profit. But, for health insurance,* it tends to not really work that way. You don't get 500,000 completely random people buying the policy. People are more likely to buy the policy if they have reason to believe they will need/profit from it. So insurance companies try to account for that reality. I think it is a fundamentally broken system.
* Car insurance, which is basically required across the U.S., seems to work a little closer to the way it is "supposed to".
Living your life according to contradictory actuarial tables cooked up by people running an anti-competitive market captured by government regulation? Sounds like fun.
1. You are making the assumption that the insurance companies models of what is and is not a risky lifestyle are correct.
2. For the same reason that your employer is not entitled to put cameras in your bathroom to make sure you aren't doing anything that might impact your job performance.
1. All other factors being equal, insurance companies with more accurate statistical models will do better.
2.. Because many employees would choose to not work for such an employer, and this negative impact would outweigh the potential benefit? I haven't seen anything to suggest that people would choose not to be insured by a company that profiles its clients in this way.
If you are going to charge people for what they use then it isn't insurance any more. That is the really silly thing in the US - the "insurance" system is really just a mechanism for obfuscating how much things cost.
And if you want to start down the "lifestyle" road then why shouldn't people who have kids pay more (it is a choice too), or the people in LA (who are more likely to get skin cancer). And remember back in the 60s people didn't think cigarettes were that harmful. Soon we'll find out that fat is good, or bad, or was it salt? Do we get to retroactively charge and refund people as scientific evidence mounts up?
I guess I disagree to some extent. Insurance is designed to protect you from rare but catastrophic losses. It's not (originally, anyway) intended to step in and pay for reasonably forseeable expenses (routine health care, for example).
A contributing reason that health insurance is so expensive is that people have been using it as a way to only pay 20% or less of expenses they know they are going to have.
By the way, if you buy your own insurance, and you have kids, or want maternity coverage, you pay more.
> Insurance is designed to protect you from rare but catastrophic losses
That is 100% correct. My point was that the US system of health "insurance" is anything but insurance.
> ... that people have been using it as a way to only pay 20% or less of expenses ...
That isn't the case. Ultimately the premiums paid by you and/or your employer as part of your "benefits" (foregone salary) will cover most of your expenses, otherwise it isn't a viable business model as pretty much everything involves an insurance transaction. The actual procedures really don't cost that much. It is the extra layers of obfuscation, administration, multiple parties etc that totally confuse what is going on.
You should try buying your own insurance someday. It becomes obvious again how it really isn't insurance. I believe California health insurance now requires maternity coverage.
Because you don't hire them to nag you, you hire them to finance certain forms of consumption. None of the numbers about even smoking have held up very well over time. "Lifestyle policing" is, like exercise mania, about vanity, not health. The exercise industry is there to pump up sports medicine spending while assuaging the Baby Boomer terror of death. Go look up which is faster rising, sports medicine or oncology. People have enough information about consumption choices to make informed choices. We should leave them be.
But the point is you hire them, they don't own you.
"The servant is the one that takes the money" - Lawrence of Arabia.
