Monday, February 1, 2010

How Health Insurance Reform Can Learn From Auto Insurance

Car Meets House (aka South Austin Parking Spot)
One of the characteristics of auto insurance is that a driver’s accident record is taken into account in the computation of auto insurance premiums to be paid [see "Safe Drivers Save on Auto Insurance"]. Thus, good drivers are rewarded with lower premiums. One of the proposals in the insurance industry is to mimic this incentive-based system found in auto insurance with health insurance. An adoption of this proposal would then mean that there are different premiums amount, which is unlike the current practice of having the same healthcare coverage at the same price for employees.

Advantages

In fact, some private employers offer special health insurance (with lower rates) to individuals who meet certain health standards such as body-mass indexes, lower blood pressure and avoidance of smoking. Supporters of this trend tout the private and public benefits of this type of system. Those who take care of their health tend to have lower medical bills, which is the ideal situation for everyone. Because of the lower costs for employers, adopting this system has garnered the support of business groups.

Roadblocks

However, there are some who oppose this practice because it may create a situation where patients with pre-existing conditions are refused health insurance or are financially penalized. Groups such as American Heart Society and American Cancer Society worry about uncontrollable features that may result in higher premiums. the For example, people taking medication that has weight gain as a side effect may be unable to qualify to weight standards imposed.

One of the major problems encountered by this proposal is that President Barack Obama has vowed to only sign plans that guarantee that no one will be charged more money by insurance companies based on the condition of their health. Obamacare, in a nutshell, tries to eliminate the occurrence of skewed incentives.


photo credit: ret0dd

11 comments:

GeorginaShenton said...

Selecting a medical insurance plan has great coverage and is affordable can be a difficult task, especially in the current state
of the economy. Still, health is our most valuable asset and it is very important to protect it as much as possible.
Thus it is essential to truly understand the importance of global medical insurance and who to go about finding it.

衣服顏色 said...

人應該做自己認為對的事,而不是一味跟著群眾的建議走。 ..................................................

VIMS Pune said...

Medical insurance is makes your money safe.
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監控 said...

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ispomyju said...

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Green Marketing and Customer Loyalty said...

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GeorginaShenton said...

Are you aware that some big organizations support health insurance reform?
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Beach Weddings in Thailand said...

Why is health insurance reform a national issue and not a state issue? beach weddings in Thailand

kareljones said...

I need a decent expat health insurance to cover me for a year whilst living and working in Tanzania. It has to be one that offers air lift from scene of accident as ambulances do not exist in the area I am living. Any help out there...and discounting the ambulance part any recommendations. For small things we have a very good on site doctor..I am more concerned with travel whilst away from work or critical illness requiring ambulance to a decent hospital.

opit said...

Did you see anything that looked as if it was designed to use market forces to correct cherrypicking ? No ? Hmmm.