# Making Private Health Insurance Illegal **URL:** \ **Category:** Great Debates\ **Created:** [July 16, 2009, 10:54am UTC](https://boards.straightdope.com/t/making-private-health-insurance-illegal/503207 "2009-07-16T10:54:07Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![UltraVires](https://avatars.discourse-cdn.com/v4/letter/u/ecccb3/32.png) [@UltraVires](https://boards.straightdope.com/u/UltraVires)\ **Post date:** [July 16, 2009, 5:17pm UTC](https://boards.straightdope.com/t/making-private-health-insurance-illegal/503207/21 "2009-07-16T17:17:24Z")
> [@Lobohan](#): > > .. but I assume the market will create other HDHPs to fill the gap. How would this happen since the bill makes it illegal to sell policies to new customers? Why would a new market spring up for a product that cannot be sold? I’m with Sateryn76 on this. I like the HSAs. I can have my own account and hold the Doctor’s feet to the fire when it comes to expenses.. ---
**Author:** ![Lobohan](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lobohan/32/79_2.png) [@Lobohan](https://boards.straightdope.com/u/Lobohan)\ **Post date:** [July 16, 2009, 8:41pm UTC](https://boards.straightdope.com/t/making-private-health-insurance-illegal/503207/22 "2009-07-16T20:41:07Z")
> [@jtgain](#): > > How would this happen since the bill makes it illegal to sell policies to new customers? Why would a new market spring up for a product that cannot be sold? > > I’m with Sateryn76 on this. I like the HSAs. I can have my own account and hold the Doctor’s feet to the fire when it comes to expenses.. Okay, seriously now. The bill does not make it illegal to sell policies to new customers. It allows current plans, no matter how they work to continue working once the bill goes live. It requires that all new plans sold after the bill goes live to comply with the bill’s requirements. For instance, plans sold after the law goes live can’t turn away people with pre-existing conditions. I assume new HDHPs will come up that obey the law’s requirements. Please, read the thread and the bill before going all chicken little on us. As an aside, you’re fooling yourself if you think you’re bargaining position of one is holding your doctor’s feet to the fire. 😉 ---
**Author:** ![elucidator](https://avatars.discourse-cdn.com/v4/letter/e/8edcca/32.png) [@elucidator](https://boards.straightdope.com/u/elucidator)\ **Post date:** [July 16, 2009, 8:45pm UTC](https://boards.straightdope.com/t/making-private-health-insurance-illegal/503207/23 "2009-07-16T20:45:39Z")
> [@Lobohan](#): > > Oh, sorry. You’re a lawyer aren’t you. Sorry… He is? Holy crap, by my ongoing count, that makes 12 lawyers on the Boards! No good can come of this! ---
**Author:** ![Lobohan](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lobohan/32/79_2.png) [@Lobohan](https://boards.straightdope.com/u/Lobohan)\ **Post date:** [July 16, 2009, 8:48pm UTC](https://boards.straightdope.com/t/making-private-health-insurance-illegal/503207/24 "2009-07-16T20:48:13Z")
> [@elucidator](#): > > He is? Holy crap, by my ongoing count, that makes 12 lawyers on the Boards! > > No good can come of this! I suppose with all the lawyers and atheists on the board we can do a dopefest in Hell. We’ll be able to Godwin debates by bringing the actual Hitler over! ---
**Author:** ![UltraVires](https://avatars.discourse-cdn.com/v4/letter/u/ecccb3/32.png) [@UltraVires](https://boards.straightdope.com/u/UltraVires)\ **Post date:** [July 17, 2009, 2:05am UTC](https://boards.straightdope.com/t/making-private-health-insurance-illegal/503207/25 "2009-07-17T02:05:12Z")
> [@Lobohan](#): > > Okay, seriously now. The bill does not make it illegal to sell policies to new customers. > > It allows current plans, no matter how they work to continue working once the bill goes live. It requires that all new plans sold after the bill goes live to comply with the bill’s requirements. For instance, plans sold after the law goes live can’t turn away people with pre-existing conditions. > > I assume new HDHPs will come up that obey the law’s requirements. > > Please, read the thread and the bill before going all chicken little on us. > > As an aside, you’re fooling yourself if you think you’re bargaining position of one is holding your doctor’s feet to the fire. 😉 I don’t think that my doctor is crying because of his lost revenue 😉 But I do notice how I argue over things. When I had the “pay everything” insurance, I didn’t care about tests, tests, more tests, follow up visits, etc. Now that I pay for each visit, he had better be able to tell me why it is necessary. It’s a good thing and it keeps costs down. [QUOTE=Lobohan] It requires that all new plans sold after the bill goes live to comply with the bill’s requirements. For instance, plans sold after the law goes live can’t turn away people with pre-existing conditions. [/QUOTE] They might as well kill these companies. There is no way that insurance can survive on this model. It would be like telling State Farm that you must sell an auto insurance policy to a guy with 3 DUIs who is drinking a beer in the insurance office right now at the same price that you sell it to Churchy McGoodDriver. And ohbytheway, the government will now be competiting with State Farm and selling auto insurance at a huge loss. Who will Churchy go with? Will he pay out the ass with State Farm or go with the government plan? That’s why I think that Obama is being disingenous here. Sure you can choose your own plan. It’s just that your own plan will be 5 times more expensive because of the policies that he created. ---
**Author:** ![kaylasdad99](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kaylasdad99/32/3398_2.png) [@kaylasdad99](https://boards.straightdope.com/u/kaylasdad99)\ **Post date:** [July 17, 2009, 2:27am UTC](https://boards.straightdope.com/t/making-private-health-insurance-illegal/503207/26 "2009-07-17T02:27:37Z")
But I thought the Great Debate here was about making private health insurance illegal, not making it an unsustainable business model… ---
**Author:** ![athelas](https://avatars.discourse-cdn.com/v4/letter/a/5e9695/32.png) [@athelas](https://boards.straightdope.com/u/athelas)\ **Post date:** [July 17, 2009, 3:41am UTC](https://boards.straightdope.com/t/making-private-health-insurance-illegal/503207/27 "2009-07-17T03:41:51Z")
> [@Lobohan](#): > > It allows current plans, no matter how they work to continue working once the bill goes live. It requires that all new plans sold after the bill goes live to comply with the bill’s requirements. For instance, plans sold after the law goes live can’t turn away people with pre-existing conditions. And that is bad, because then adverse selection comes into play. If you’re healthy, you are less willing to pay for insurance, so you stay out of the market, meaning it’s full of sick people that drives up rates. The sickest get the best deal and the healthy get shafted, so they’ll do what they can to avoid being covered. Currently, there is a good reason for young’uns to join up, and that is because insurers recognize that they’ll be easy to cover, and offer them lower rates as a result. The only time adverse selection is a problem is in a few states where insurance companies are forced to accept all comers at the same rate. In most states, if you’re a health hazard, then you’ll pay higher rates, just like a riskier driver pays more for auto insurance. There is market equilibrium, and no adverse selection. Now, you can throw up your hands and say that that’s terribly unfair, and we should have the healthy should subsidize the sick. But subsidies should be separated from healthcare systems. Adverse selection only happens when the government overregulates healthcare markets, and if we want to subsidize the sick we should leave that particular market alone, and give them money directly. From [here](http://www.marginalrevolution.com/marginalrevolution/2005/12/adverse_selecti.html): > [@](#): > > There is no evidence for an adverse-selection death spiral in the market for health insurance. That’s not surprising because non-group health insurance is medically underwitten (i.e. medical inspections just like car inspections). Most people are accepted a few are not. Only in states that require insurance companies to accept all or most buyers are rates high relative to the group market (rates in New Jersey, an outlier, are almost three times as high as the national average.) ---
**Author:** ![IdahoMauleMan](https://avatars.discourse-cdn.com/v4/letter/i/71c47a/32.png) [@IdahoMauleMan](https://boards.straightdope.com/u/IdahoMauleMan)\ **Post date:** [July 17, 2009, 4:04pm UTC](https://boards.straightdope.com/t/making-private-health-insurance-illegal/503207/28 "2009-07-17T16:04:44Z")
> [@elucidator](#): > > He is? Holy crap, by my ongoing count, that makes 12 lawyers on the Boards! > > No good can come of this! I guess I’m missing the whole lawyer joke. Is the point that an SDMB poster should doubt his own ability to interpret a 1,000+ page bill correctly, because he/she isn’t a lawyer? And that only lawyers are qualified to interpret it correctly? ---
**Author:** ![ElvisL1ves](https://avatars.discourse-cdn.com/v4/letter/e/5daacb/32.png) [@ElvisL1ves](https://boards.straightdope.com/u/ElvisL1ves)\ **Post date:** [July 17, 2009, 4:28pm UTC](https://boards.straightdope.com/t/making-private-health-insurance-illegal/503207/29 "2009-07-17T16:28:38Z")
> [@jtgain](#): > > They might as well kill these companies. There is no way that insurance can survive on this model. It would be like telling State Farm that you must sell an auto insurance policy to a guy with 3 DUIs who is drinking a beer in the insurance office right now at the same price that you sell it to Churchy McGoodDriver. First, driving habits are a matter of choice, and there is little room for argument about the reasonability of charging drivers on the basis of their choices. Illness and injury are generally matters of chance, not choice. There is plenty of room for argument about charging people on the basis of their luck. Second, an insurance company only has to have the total of their premiums and investment income equal the total of their expenses. They don’t have to “make a profit” on every single customer even if they often seem to try to. Even operating fully privately, an insurance company can certainly survive with a single-rate plan. The concept that the people have a duty to subsidize the insurance companies is an odd one. ---
**Author:** ![Lobohan](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lobohan/32/79_2.png) [@Lobohan](https://boards.straightdope.com/u/Lobohan)\ **Post date:** [July 17, 2009, 4:29pm UTC](https://boards.straightdope.com/t/making-private-health-insurance-illegal/503207/30 "2009-07-17T16:29:03Z")
> [@IdahoMauleMan](#): > > I guess I’m missing the whole lawyer joke. > > Is the point that an SDMB poster should doubt his own ability to interpret a 1,000+ page bill correctly, because he/she isn’t a lawyer? > > And that only lawyers are qualified to interpret it correctly? I think the point about lawyers was that the OP and several other posters utterly misunderstood the bill. My layperson’s reading said they were wrong and I wanted a lawyer to back up my assessment. Funtip: If something you read on a blog outrages you to the point of fury, wonder if the blog is wrong. ---
**Author:** ![ElvisL1ves](https://avatars.discourse-cdn.com/v4/letter/e/5daacb/32.png) [@ElvisL1ves](https://boards.straightdope.com/u/ElvisL1ves)\ **Post date:** [July 17, 2009, 4:29pm UTC](https://boards.straightdope.com/t/making-private-health-insurance-illegal/503207/31 "2009-07-17T16:29:40Z")
> [@elucidator](#): > > He is? Holy crap, by my ongoing count, that makes 12 lawyers on the Boards! > > No good can come of this! Sure it can, and does. Don’t tell me you don’t sit back and pop a beer when they go after each other. ---
**Author:** ![Frylock](https://avatars.discourse-cdn.com/v4/letter/f/ce7236/32.png) [@Frylock](https://boards.straightdope.com/u/Frylock)\ **Post date:** [July 17, 2009, 5:34pm UTC](https://boards.straightdope.com/t/making-private-health-insurance-illegal/503207/32 "2009-07-17T17:34:19Z")
> [@ElvisL1ves](#): > > First, driving habits are a matter of choice, and there is little room for argument about the reasonability of charging drivers on the basis of their choices. Illness and injury are generally matters of chance, not choice. There is plenty of room for argument about charging people on the basis of their luck. > > Second, an insurance company only has to have the total of their premiums and investment income equal the total of their expenses. They don’t have to “make a profit” on every single customer even if they often seem to try to. Even operating fully privately, an insurance company can certainly survive with a single-rate plan. > The concept that the people have a duty to subsidize the insurance companies is an odd one. (Does the law even say that people with pre-existing conditions have to be covered at the same rate as people without? I knew it said they have to be covered, but I assumed the coverage would be more expensive.) ---
**Author:** ![Grumman](https://avatars.discourse-cdn.com/v4/letter/g/43a26b/32.png) [@Grumman](https://boards.straightdope.com/u/Grumman)\ **Post date:** [July 17, 2009, 5:55pm UTC](https://boards.straightdope.com/t/making-private-health-insurance-illegal/503207/33 "2009-07-17T17:55:44Z")
> [@ElvisL1ves](#): > > First, driving habits are a matter of choice, and there is little room for argument about the reasonability of charging drivers on the basis of their choices. Illness and injury are generally matters of chance, not choice. There is plenty of room for argument about charging people on the basis of their luck. > > Second, an insurance company only has to have the total of their premiums and investment income equal the total of their expenses. They don’t have to “make a profit” on every single customer even if they often seem to try to. Even operating fully privately, an insurance company can certainly survive with a single-rate plan. The problem with this view is that there’s no reason why your low-risk customers - the ones that _aren’t_ costing you more than they pay you - are going to stick around when the costs of doing so are higher than the benefits. > [@](#): > > The concept that the people have a duty to subsidize the insurance companies is an odd one. You don’t appear to understand what that word means, as your position _is_ the pro-subsidy one. Assuming Person A uses an average of $50 of services per year, and Person B uses $5,000 of services per year: If you charge both Person A and Person B $2,525 (plus admin costs), Person A is subsidising Person B’s cover, because you are charging Person A $2,525 for a $50 service, so that you can afford to give Person B a $5,000 service while only charging them $2,525. If you charge Person A $50 (plus admin costs) and charge Person B $5,000 (plus admin costs), nobody is subsidizing anyone. **Charging someone for the services they are using is not a subsidy.** ---
**Author:** ![ElvisL1ves](https://avatars.discourse-cdn.com/v4/letter/e/5daacb/32.png) [@ElvisL1ves](https://boards.straightdope.com/u/ElvisL1ves)\ **Post date:** [July 17, 2009, 6:05pm UTC](https://boards.straightdope.com/t/making-private-health-insurance-illegal/503207/34 "2009-07-17T18:05:27Z")
> [@Grumman](#): > > The problem with this view is that there’s no reason why your low-risk customers - the ones that _aren’t_ costing you more than they pay you - are going to stick around when the costs of doing so are higher than the benefits. The problem with that view is that the driving idea behind universal health care is its guaranteed _availability_, not the competitiveness of its price. > [@](#): > > You don’t appear to understand what that word means, as your position _is_ the pro-subsidy one. Your position is, or at least seems to be, that the “needs” of the insurance companies are paramount, and that any change or extension to the system must guarantee their profitability. That’s a subsidy, all right. > [@](#): > > **Charging someone for the services they are using is not a subsidy.** No, that’s simply pay-per-service, not insurance at all. Sure, if everyone could pay for their expenses out of pocket, there wouldn’t be a problem. But that isn’t the case. ---
**Author:** ![ElvisL1ves](https://avatars.discourse-cdn.com/v4/letter/e/5daacb/32.png) [@ElvisL1ves](https://boards.straightdope.com/u/ElvisL1ves)\ **Post date:** [July 17, 2009, 6:06pm UTC](https://boards.straightdope.com/t/making-private-health-insurance-illegal/503207/35 "2009-07-17T18:06:50Z")
> [@Frylock](#): > > (Does the law even say that people with pre-existing conditions have to be covered at the same rate as people without? I knew it said they have to be covered, but I assumed the coverage would be more expensive.) Dunno, but the final version is yet to be written. ---
**Author:** ![ElvisL1ves](https://avatars.discourse-cdn.com/v4/letter/e/5daacb/32.png) [@ElvisL1ves](https://boards.straightdope.com/u/ElvisL1ves)\ **Post date:** [July 17, 2009, 6:09pm UTC](https://boards.straightdope.com/t/making-private-health-insurance-illegal/503207/36 "2009-07-17T18:09:42Z")
> [@Grumman](#): > > **Charging someone for the services they are using is not a subsidy.** To clarify further, an insurance system, a shared-risk pool is most certainly a subsidy program. People who get unlucky and need more medical care are subsidized by the lucky who need less. Why, in your view, should they not have to pay more? ---
**Author:** ![Grumman](https://avatars.discourse-cdn.com/v4/letter/g/43a26b/32.png) [@Grumman](https://boards.straightdope.com/u/Grumman)\ **Post date:** [July 17, 2009, 6:33pm UTC](https://boards.straightdope.com/t/making-private-health-insurance-illegal/503207/37 "2009-07-17T18:33:33Z")
> [@ElvisL1ves](#): > > The problem with that view is that the driving idea behind universal health care is its guaranteed _availability_, not the competitiveness of its price. “Competitiveness of its price” is the only reason why insurance has any value. Universal health care is worse than useless unless your health care is offered at a price that doesn’t make people worse off for joining. > [@](#): > > Your position is, or at least seems to be, that the “needs” of the insurance companies are paramount, and that any change or extension to the system must guarantee their profitability. That’s a subsidy, all right. This isn’t a subsidy either. But yes, my position is that the need to ensure that the entire system doesn’t go bankrupt is paramount, because a bankrupt company can’t pay insurance claims. > [@](#): > > No, that’s simply pay-per-service, not insurance at all. The “service” is the conversion of random expenses of random severity into a predictable constant. The cost of providing that service, and the benefit received by the customer of that service, is dependant on their level of risk. > [@](#): > > Sure, if everyone could pay for their expenses out of pocket, there wouldn’t be a problem. But that isn’t the case. You appear to be operating under the assumption that the downsides of both options are equally bad. But one merely can’t cater to everyone, while the other _can not function_. ---
**Author:** ![Grumman](https://avatars.discourse-cdn.com/v4/letter/g/43a26b/32.png) [@Grumman](https://boards.straightdope.com/u/Grumman)\ **Post date:** [July 17, 2009, 6:42pm UTC](https://boards.straightdope.com/t/making-private-health-insurance-illegal/503207/38 "2009-07-17T18:42:48Z")
> [@ElvisL1ves](#): > > To clarify further, an insurance system, a shared-risk pool is most certainly a subsidy program. People who get unlucky and need more medical care are subsidized by the lucky who need less. Why, in your view, should they not have to pay more? If each customer is charged according to their risk, any member may come out in front, and any member may come out behind. Since everyone has an equally good chance of coming out ahead, there isn’t a disincentive to participate. Your proposal is to skew this, so that some customers come out ahead more frequently, while others come out ahead less frequently. But if you do this, the people who now have a worse chance of coming out ahead have no reason to stick around. ---
**Author:** ![SenorBeef](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/senorbeef/32/2220_2.png) [@SenorBeef](https://boards.straightdope.com/u/SenorBeef)\ **Post date:** [July 17, 2009, 7:10pm UTC](https://boards.straightdope.com/t/making-private-health-insurance-illegal/503207/39 "2009-07-17T19:10:23Z")
> [@Richard\_Parker](#): > > Article I, Section 8, Clause 3. And if I may paraphrase the current interpretation of Acticle 1, Section 8, Clause 3: “Article 1, section 8 is meaningless. Please ignore it and do whatever you want.” ---
**Author:** ![mlees](https://avatars.discourse-cdn.com/v4/letter/m/ba8739/32.png) [@mlees](https://boards.straightdope.com/u/mlees)\ **Post date:** [July 17, 2009, 7:15pm UTC](https://boards.straightdope.com/t/making-private-health-insurance-illegal/503207/40 "2009-07-17T19:15:54Z")
> [@Lobohan](#): > > I suppose with all the lawyers and atheists on the board we can do a dopefest in Hell. > > We’ll be able to Godwin debates by bringing the actual Hitler over! Sorry. My sources tell me he’s booked solid for the next millenium. [Previous page](https://boards.straightdope.com/t/making-private-health-insurance-illegal/503207.md?page=1) [Next page](https://boards.straightdope.com/t/making-private-health-insurance-illegal/503207.md?page=3)