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by tomp 2456 days ago
I don't think the size of the pool is that relevant. The pool from the perspective of insurance company is all insured people, so it doesn't matter whether it's a company of 5 or 5 individuals joining, it's still a huge pool.

Adverse selection is the big reason. An individual signing up for insurance can be used as a signal that means "individual is sick" or "individual is likely to need insurance soon". If a company policy covers all employees (or all employees above a certain level), the signal is "person works" which is orthogonal to "person will need insurance" (in fact, it's probably slightly anti-correlated, a.k.a. "person is fit enough to work").
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dredmorbius 2456 days ago
Adverse selection among groups is an issue, given adverse selection: individuals or small groups with high but non-evident risks may emerge.

"Small-group" coverage is generally 50 or fewer (in some states, 100) members:

https://www.healthinsurance.org/glossary/small-group-health-...

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kmjg88nvf8 2456 days ago
I think people who are already sick should be covered by a kind of charity (or social services). It doesn't make sense to ask insurance companies to insure people who are already sick.
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dredmorbius 2456 days ago
An alternative is to have random-lot assignments, at least so long as you care to preserve a private, for-profit, insurance sector. That is, members of a given population is assigned, at random, to a set of insurance providers, who have minimum performance and obligation standards.

Otherwise, the socialised version already exists, in most industrialised countries, in some form or another. Within the US, Medicare for the elderly, Medicaid for the poor and children, and in many states, "high risk pools" which are state managed.

More generally, a problem is that the bulk of health benefits do _not_ accrue from direct or acute medical treatment, but from public health and preventive measures, _especially_ well-mother, well-baby, early childhood, municipal sanitation and environmental measures, and general (workplace and elsewhere) safety provisions. Insurance companies of and by themselves don't address much of this.

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