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Sunday, September 19, 2004

Posted by Jake
Random Thought on Healthcare

I had a thought this evening while I was running, and I am curious what you think. What if health care companies charged you higher or lower premiums depending upon whether you lived a healthy life and did what your doctor told you to? We charge people who speed more for their car insurance. The costs of healthcare for the obese are predictably higher, and it would encourage people to lead healthier lives. Compliance with what your doctor tells you to do in the manner of good diet, exercise and no illicit drug use could be confirmed by (much more regular in this system, say every 6 months) check ups which would also guarantee that most treatable conditions would be detect earlier. Any company that adopted such a policy would likely get a clientelle of mostly those who tend towards good health anyway leaving most of their payouts for catestrophic loss. I think it would work.

Thoughts?

Brian: On a first glance, I personally like the idea. Where you'll have a problem, though, is with the right-to-healthcare types. They'll tell you that proper healthcare cannot hinge on behavioral choices, because healthcare is a right.

Jake: I see what you mean, but if I were running such a company I would respond, "There is nothing forcing you to buy insurance from me. There are other companies. You can buy it from me or you can buy it from them or you can change your lifestyle." I wonder if that is a legal thing to do under current law. Do you think healthcare law prohibits changing rates based on obesity? You would also probably be accused of charging people for their poor genetics. I personally think that people wildly overestimate the role of genetics in obesity, but you would have to defend yourself from that charge.

Matt: Just thought I'd make a brief appearance :-) To some extent insurance companies already charge variable premiums. Every insurance company charges a higher premium to smokers. As a member of the American obese community I can attest that higher premiums apply for that too. For the most part, that's probably fair. However, I think the real cost issue has more to do with the broader economics of healthcare rather than then people leading unhealthy lives. There is another important issue here though: privacy. Is it really fair to demand that people let "the powers that be" sample their blood every six months or be effectively denied health care? Now I usually tend agree that a free market approach usually works the best, but this isn't a true free market to begin with. Its a complex mix of government regulation, insurance, R&D expenses, education expenses, etc, etc. I don't mean to sound like a paranoid libertarian, but how much control of our lives do we really want to relinquish to people who've botched the system up in the first place?


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