Forgetting shared risk

In all the discussion of health insurance, there doesn’t seem to be acknowledgment of the basic idea of insurance: shared risk. The whole point is that the total amount of money collected from all those covered is to pay all of the expenses of the insured plus enough above that to keep the insurance company in business.

A state-mandated insurance we are currently paying is auto insurance. I am delighted that I have paid more to USAA, my insurance company, than I have received from them. I would not feel myself lucky if I received more, since that would mean I suffered one or more major automobile accidents.

Similarly there need to be people paying more for health insurance than they receive in medical care. People with preexisting conditions can cost a lot or they can die. That money has to come from somewhere. If it doesn’t, then the cost involved is for the funeral parlor. The alternative case is those who use the emergency room as their health care. In that case, everyone else is paying for the health care or else the hospital does not survive financially.

Timothy Rolfe

Spokane