[ShrinkingWild]

>It would be great until there was a hard year and the insurance companies would have the be bailed out by the taxpayers.

Surely that wouldn't be the case? They wouldn't have to be bailed out; If a company hadn't planned ahead well enough to survive a bad year then they deserve to go under. In an unregulated economy, bailing out failed companies shouldn't be an option.

[chii]

except all those people who's supposed to have been insured will now no longer be (but would've paid their premium, at least partially). So what happens then? Either those people lose their money, or the state bails them out.

If the gov't forces an insurer to keep a reserve (for such an occasion), then it becomes regulation!

[ShrinkingWild]

Those people lose their money. I can't think of a good reason why they'd expect to get that money back, they were paying for a service that was being provided up until the company could no longer provide it.

Losing your money to a failed company is a cost of doing business sometimes, it's a risk everybody takes when they purchase things in advance. The company/owner would owe a refund for the service not provided due to company collapse, whether or not they can pay that is another matter and should be accepted as part of the risk. There's no such thing as risk free business and attempts to remove the risk inevitably remove part of the value too.

[vageli]

> Those people lose their money. I can't think of a good reason why they'd expect to get that money back, they were paying for a service that was being provided up until the company could no longer provide it.

> Losing your money to a failed company is a cost of doing business sometimes, it's a risk everybody takes when they purchase things in advance. The company/owner would owe a refund for the service not provided due to company collapse, whether or not they can pay that is another matter and should be accepted as part of the risk. There's no such thing as risk free business and attempts to remove the risk inevitably remove part of the value too.

I think we as a society have deemed it unacceptable to hold consumers accountable for company selection in some specific industries. Banking and healthcare come to mind. We certainly don't think it's okay for depositors to lose their shirts over a banker's risk taking and we hold that value to such a degree that in America at least it has been codified into law.

I know at least NJ mandates a separate fund that insurers must pay into to protect against this instance.

[ShrinkingWild]

I don't agree that that is unacceptable, regardless of what "we as a society" have deemed. The consumers being held to account for their own business dealing is the reality of the situation, they're giving their money over to the business and in doing so accept the risk. Taking that risk and putting it on everyone who didn't take that risk through bailouts using tax money is unacceptable. Analogizing to a more personal scenario to highlight the moral wrong: It's as unacceptable to me as it would be if I had an accident in my car and forced everybody in the nearby vicinity who wasn't involved to pay for the repairs.

Businesses having separate funds to protect against it is a good idea but it shouldn't be mandatory to have one, only to tell the consumer whether there is one. I imagine most consumers would happily pay a little more and choose the company with one than the one without.

[chii]

For businesses that provide somewhat of an essential service, the 'buyer beware' mantra does not result in societally good outcomes.

For example, healthcare services should be considered essential, and therefore, should not be left up to the market forces, as these forces would mean that some part of the population who is not profitable to serve will not get served.

in such cases, the best option is a socialized mechanism (such as universal healthcare, paid for by taxation). For some reason, the US of A is very much against this idea. It's as if these ideas have been tainted with the smear campaign of communism and red-scare.

[ShrinkingWild]

This is likely the core of our disagreement; Healthcare is not essential, it's a luxury that has been afforded to us by those who were willing to study and learn how to do it in an advanced manner. No one has a 'right' to a healthcare professionals time and effort, same as no one has a right to my programming ability or an uber drivers driving capabilities. To phrase that in the positive light, everyone has the right to the product of their own labour, including healthcare professionals, regardless of the social cost that brings.

Leaving healthcare to 'market forces' is nothing more than leaving doctors alone to do healthcare as they please and for a profit that they earn, rather than using government to force prices down and make them work for less than they're worth.

I'm not opposed to a health care option provided by government, but it has to be optional both to pay in and use in order to be a morally sound imo.

[timoth3y]

> If a company hadn't planned ahead well enough to survive a bad year then they deserve to go under.

Maybe, but we don't deserve to have them take the rest of the economy with them.

It's hard to overstate how much of the economy depends on insurance. If an insurance company becomes insolvent and can no longer cover it's long term liabilities, elderly people who were counting on life insurance or annuities will starve and the newly uninsured in need of operations will die.

If the human toll does not impress you, consider that the entire economy would freeze up without insurance. Residential and commercial building, freight shipment, construction, and most sizable loans all require insurance coverage.

The insurance industry is not like a banana stand. We need to (and do) strictly regulate and audit these companies.

[ShrinkingWild]

The idea that all the insurance companies would go bust at the same time is laughable, it's a hypothetical with no basis. Even taking your hypothetical though, my opinion remains unchanged, people reaping the rewards, or in this case punishments, of their reliance on others is just. Granted, I'm not saying you shouldn't be relying on others, just that you understand exactly who you're relying on and the consequences of that should they let you down.

The pragmatic argument you're making saying the economy would freeze up isn't really relevant. You can only be pragmatic within a moral framework, with a value that you're aiming at and I'm speaking to that underlying moral framework. I would rather live in a moral, failing world than an immoral and thriving one.

That's all accepting your premise that regulation helps the economy though, I think the reality is that an unregulated (and therefore more moral by my estimation) economy would come back and be stronger having learnt not to rely on insurance so much.

[TuringNYC]

>> Surely that wouldn't be the case?

That literally was the case in 2008 with AIG

[ShrinkingWild]

Parent mentioned it would have to be the case, it doesn't have to. If it makes you feel any better replace it with "shouldn't" in your head.