[akgoel]

I hear this all the time, and I somewhat disagree. The problem is that unhealthy people do not want to pay the full amount of their risk-adjusted rate into the risk-pool. Therefore, they need healthy people to subsidize them. It makes sense that pooling a group of employees together would be uncorrelated to health status, and would therefore make a good proxy for a risk-pool.

[smt88]

Some of the most common jobs in the US are driving trucks and working in warehouses. Those people are not some kind of random sample of healthy and unhealthy people. They tend to have chronic pain and metabolic disease at young ages.

If you want to pool healthy and unhealthy people together, you use the system that has worked in every other developed country, some for almost 100 years: pool everyone together. The whole point of a functioning government is for all of us to pool resources together to reduce risk for ourselves in our daily lives. Private health insurance makes absolutely no sense.

[ahartmetz]

>almost 100 years

110-140 years in Germany, depending on "how everyone" you want. The workers were getting restless (protesting) about some of their hardships, so the conservative emperor asked the conservative chancellor to do something about their welfare in order to keep them away from the bad people (communists, socialists).

[sergiogdr]

Thank you for this.

[vel0city]

What if I stead of making the pooling "employees" we pooled on something else, like "citizens" or "residents"?

Why should it be "employees"?

[sneak]

Because not everyone wants to pay for the same class of service.

The lowest common denominator is something like the NHS, with its well documented problems.

Many people wish to pay the minimum possible, and many people wish to pay for higher service and lower wait times. There must be some way of deciding who is prioritized for access to limited resources, and incentivizing increasing supply.

[vel0city]

> Because not everyone wants to pay for the same class of service.

You can still have choice for more service if you want even if there is a public option.

And even then, it's not like the current employment-tied plans really offer much choice. I either take the 1-2 plans my employer offers or I can go pay a fortune in the marketplace. Imagine if those 1-2 plans were not tied to employment, and if employers weren't expected to directly shoulder all that cost to have employees in the US

[InsideOutSanta]

"Because not everyone wants to pay for the same class of service."

Countries with socialized healthcare systems usually mandate a basic level of service, but you can then buy additional insurance on top of that. That's what the NHS is, it's the basic mandatory service everybody has to have. But it's not all you have access to. You can get better healthcare if you want to.

In the UK, this type of additional healthcare is also sometimes provided as part of a job benefit.

[rich_sasha]

Actually, having a national service + private insurance is quite good. That's what the UK does (well, except the NHS is possibly going bust).

Because in principle the state insurer provides you with every service, just possibly not very well or in appropriate time, the private insurers have to compete with it and demonstrate some added value.

Ironically, as the NHS is going downhill, the insurers in the UK, IME, are getting Americanised too.

[Gud]

Frankly this doesn’t sound so great to me. “Not very well and too late” sounds like something you should expect from a poor country?

[rich_sasha]

As I say, it is now breaking down.

But say in 2019, you could expect from the totally free, universal provider to treat anything: broken bones, medical emergencies, teeth, bad back, headaches, cancer, dementia, mental health... Even some cutting edge treatments were available. And yes, you'd wait longer than you'd like, but it would come in decent time. The hospital food would be so-so and you'd probably share a room with lots of people, but it would be free - you could spend not a penny.

Then the private insurers were cheap-ish and had to have good customer care. Now, the NHS is in disarray, private healthcare effectively doesn't have any competition and IME stopped trying.

[SketchySeaBeast]

You're defining it in terms of "wants" and "wishes", which seems disingenuous. People aren't choosing not to get better health care.

[salawat]

You have to understand that after a certain point, the internal narrative has to shift for some people in a capitalist economy to one in which people who can't afford something because the price is too high means they simply don't want it enough. This allows the price setter to ignore their own part in the manufacturing of the suffering of another.

That there is such a thing as a base necessity that should be baked into the human condition is basically anathema to the theoretical worldview. This worldview tends to persist as long as one is lucky enough to never pick up one of those meddlesome chronic conditions of existence whereby one has to rely on others to merely exist.

I'm convinced the United States has attracted a type of psychopath that just thinks money is the end all be all of existence, instead of social cohesion, and we're all suffering for it.

[pfdietz]

People choose this all the time, if it saves them money. It's like some people will choose a risky job, or a job that comes with predictable negative health implications, if they can make sufficiently more money.

[skirge]

you can choose between paracetamol or health transplant, or hearth transplant which is too risky because of reasons and not covered by public system

[awongh]

That makes logical sense in terms of grabbing onto a specific mechanism for risk hedging, which would be how we accidentally and naturally arrived at this system.

But it doesn't make sense within a larger society in that you drop out of the pool of insurance-eligible people as soon as you have a health issue that limits your employability.

In fact, that specific case makes it seem totally insane and backwards. Why would you link a thing like employment to your health when your ability to work is directly tied to your health? What a crazy catch-22.

[ghaff]

As I understand it, a lot of reason was originally to end-run around wage controls and then got enshrined through some combination of collective bargaining and then generalized employee expectations. But to your point, even if you decouple from employment, it doesn't really help if you're paying $7K+ for individual health insurance as a person who is too ill to work. (Yes, larger companies in particular have disability insurance but this is hardly universal.)

[awongh]

There's definitely a psychological component of what people are willing to pay for and what costs get hidden- if the full insurance premium was shown to be directly taken out of your paycheck every month people would complain, but if the employer-paid premium isn't factored into your salary you don't know how much wages you're missing out on. Even if 100k salary with 10k of hidden premiums is the same as 110k with 10k taken out each month.

[ghaff]

There are some tax effects as well. But, yeah, people don't really think of benefits as coming out their paychecks although they are, of course, at some level whether they personally would ever take advantage of them or not. A lot of cross-subsidies happen with benefits.

[fsmv]

The risk pool should be as large as possible, the whole country, to minimize costs for everyone.

It's deeply unfair to tell someone that lost their job that they also now have no access to healthcare.

[mgh95]

> The risk pool should be as large as possible, the whole country, to minimize costs for everyone.

The risk pool being larger does not necessarily improve the risk pool.

[SketchySeaBeast]

Shouldn't insurance risk pools be trying to move towards the large and average? This allows insurance to be more resilient to sudden changes in health by accepting that people are going to get sick. I don't know how having tiers of health care with low risk pool and high risk pools would be advantageous to anyone but the young and healthy who inevitably become the old and sick, which is painfully short term thinking for the former and unfairly punishing for the latter.

[mgh95]

No, the risk pools should not be "trying to move towards large and average". The insurers should be utilizing their market position to incentivize both employers and employees to adopt practices that reduce healthcare needs.

One instance of this is smoking. Insurers charge more towards groups with smokers, and groups signing up based upon smoking policies of the employer (prohibition on smoking) can result in significant discounts to the group.

Ultimately, we are a rather unhealthy country. We really need to figure out effective ways to utilize financial incentives to either (1) get people healthier or (2) defray the increased costs due to characteristics which may be addressed through habit changes, such as smoking and obesity.

[SketchySeaBeast]

> The insurers should be utilizing their market position to incentivize both employers and employees to adopt practices that reduce healthcare needs.

They have no need to when they can simply deny claims or coverage. It seems strange to me that we should have private corporations shaming the public by acting as the arbiters of health. I agree that people have unhealthy habits, but some of these coverage items have nothing to do with personal choices. There are conditions people are born with or develop without being able to control them. The elderly need more care, and that's not fault of their own outside of simply living long enough.

[mgh95]

> They have no need to when they can simply deny claims or coverage. It seems strange to me that we should have private corporations shaming the public by acting as the arbiters of health. I agree that people have unhealthy habits, but some of these coverage items have nothing to do with personal choices.

You can't deny claims to an obese person for a joint replacement. If it was part of the policy, you can't deny the treatment simply because someone had a condition they could have avoided if they had adopted different practices.

> I agree that people have unhealthy habits, but some of these coverage items have nothing to do with personal choices. There are conditions people are born with or develop without being able to control them. The elderly need more care, and that's not fault of their own outside of simply living long enough.

This is an area I do agree with to some extent: we should be much more discerning what we consider "preexisting" conditions; congenital heart defects from birth should be covered, but eating deep fried oreos every day for and washing it down with a handle of vodka shouldn't. This is generally not controversial to most laymen, however states such as CA (see: https://leginfo.legislature.ca.gov/faces/billVersionsCompare...) outright limit the ability of insurers to impact consumer behavior. There needs to be a much more clear-eyed view of mutable vs. immutable characteristics and how we permit insurers to underwrite risk, and how we as a society perceive things such as genetic defects verus excess alcohol consumption.

(to put it in perspective, insurers made 25B in profit in '23 (see: https://content.naic.org/sites/default/files/industry-analys...). Alcoholism cost 249B (see https://www.niaaa.nih.gov/publications/brochures-and-fact-sh....), obesity cost 426B (see https://hrp.net/hrp-insights/report-obesity-cost-employers-a....))

> The elderly need more care, and that's not fault of their own outside of simply living long enough.

In my view, one of the big problems with the risk pool is young (myself included) buy catastrophic instead of health because of the 3x max charge on elderly. This is a nice to say, but the costs don't pencil out and this needs to be handled out-of-band for standard healthcare. Elder care is a problem, but it is one that can't be solved by risk pooling and is a contributing factor to typical healthcare premium increases.

source for this: I work in the industry owning two (small) businesses in this area, and was looking to expand into insurance directly, and am running into the fact you can only do so much to limit costs on obesity and other things. It's a real problem that insurers can't actually reflect risk accurately.

[RobotToaster]

> The problem is that unhealthy people do not want to pay the full amount of their risk-adjusted rate into the risk-pool.

You think it's a problem that those with genetic disabilities don't want to be priced out of having health care?

[formerly_proven]

Most unhealthy people are unhealthy by choice.

[utopicwork]

You got any numbers on that or just bigot bravado?

[formerly_proven]

The majority is somewhere between overweight and vastly obese, which is a choice (even in HN's latest boondoggle of "you lose weight if and only if you are injected the right drugs", obesity remains a choice). Similarly, the vast majority of people don't even meet the basic WHO guidelines on physical activity, which is even more obviously a choice. It is well-known that making these choices precipitates virtually every common, serious disease. Therefore, most people are unhealthy by choice.

[s1artibartfast]

That is an argument for mandatory healthcare, not tying it to employers.

The real challenge with employer-tied healthcare is the lowest wage workers would not be able to afford it otherwise.

High pay workers would receive a salary bump to compensate if healthcare were decoupled. Low paid workers wouldn't because they are already compensated above the market clearing rate for their labor.

[aqme28]

Why would it be uncorrelated? It is not unheard of for people to lose their job due to health issues, which then means they lose health coverage too. It's like they never really had coverage at all.

[Glyptodon]

There are lots of ways to have big risk pools. The bigger issue is that the things you most need insurance for are often so bad you won't be able to work or won't remain employed.

On top of that, historically the connection discouraged entrepreneurship.(With the exchanges I think that's maybe slightly less the case. Though risk pools issues with small businesses do favor larger businesses IMO.)