[im3w1l]

I think this isnt a good solution. Imagine the following scenario. A disease hits with p=0.001. To cure it is Very Expensive. Everyone gets insurance that covers it.

Now imagine we have a test, that can predict it with certainty. Very soon only those with positive results will want insurance. The insurance against it will become unprofitable and discontinued.

[mahyarm]

This is the reason why single payer healthcare systems based on residency make economic sense, it prevents this exact situation. We already have this problem to an extent, it's called being elderly.

[CamperBob2]

Insurance is a pretty stupid model for health-care financing, in any case. It's not "insurance" if you know that everybody will eventually need to file a claim.

But that's one of those inconvenient truths that American politics refuses to confront.

[ghshephard]

I won't disagree (coming from Canada) that the american "For Profit Medical Insurance" system is pretty cold ("You're poor? You get the cheapest possible health care that keeps you out of the emergency room, which you are more likely to land in because you haven't been getting very good medical care.") - but it is insurance. Some people go fifty years without needing it. Some people make claims multiple times a year for hundreds of thousands of dollars of medical care...

[justincormack]

Indeed true. And it seems to make an extremely expensive system out of it. But it also manages to do much of the worlds medical research so there are right bits amid the wrongs.

[apaprocki]

I'm pretty sure the spirit of the law is to prevent those types of situations from happening. Wouldn't this cover your situation?

"`(1) IN GENERAL- A health insurance issuer offering health insurance coverage in the individual market may not, on the basis of genetic information, impose any preexisting condition exclusion (as defined in section 2701(b)(1)(A)) with respect to such coverage."

[philh]

In insurance, people who get lucky subsidize people who get unlucky. If you can test luck before getting insurance, then lucky people don't get insurance and there's nobody left to subsidize unlucky people.

Forbidding insurance companies to discriminate based on luck does not solve this problem, because the problem is caused by customers selectively buying insurance based on their own luck.

(Clarification: I'm describing reality-as-I-see-it. I'm not trying to make moral judgements on what laws we should or shouldn't pass.)

[PeterBB]

This is the precise reason for the "individual mandate" in Obamacare. The two provisions only work in combination.

[chimeracoder]

> philh 2 hours ago | link | parent

In insurance, people who get lucky subsidize people who get unlucky. If you can test luck before getting insurance, then lucky people don't get insurance and there's nobody left to subsidize unlucky people.

> Forbidding insurance companies to discriminate based on luck does not solve this problem, because the problem is caused by customers selectively buying insurance based on their own luck.

It's a little more nuanced than that. Let's say men are more prone to car crashes than women. Either you charge men more for auto insurance, OR you charge everyone a flat rate, and the market will rapidly clear itself of all women, since that flat rate will be too high to appeal to women. In this case, you end up with a market that's exclusively men, and women are uninsured.

When applied to health insurance, this means that, if you're forcing companies to insure everyone, they will have to insure people predisposed to expensive illnesses at incredibly high rates, because that's the expected cost of their lifetime care.

One implication of this is that the "no discrimination for pre-existing conditions" portion of the ACA is equivalent to "if you have a pre-existing condition, your coverage will be exorbitantly expensive".

There are ways of hiding this extra cost, but at the end of the day, it's like sweeping dust under the rug: it all has to sum to zero.

[xugle]

There's an easy way to weed out unlucky people. Just randomly throw out half the applicants. (You can substitute any proportion for "half" based on business needs)

[ef4]

> Now imagine we have a test, that can predict it with certainty. Very soon only those with positive results will want insurance. The insurance against it will become unprofitable and discontinued.

That does leave a time when the risk is still insurable: before the test is conducted.

One can imagine it evolving as an additional service that the testing provider may partner with insurance companies to provide. At the time you buy the test, they say "if you pay an extra $X now, you get insurance against us finding anything catastrophic."

(Just idly speculating here, who knows how these things will play out in a combination of regulatory, market, and technology changes.)

[carbocation]

But since your parents had the test, and they know your parents' results, your probability of having the (genetic) disease is not exactly unknowable by the insurance company.

[mikeash]

You'd have to prove that you didn't already have the test performed, which sounds tough. For example, maybe you flew to Elbonia to get an illicit test done in some dark alley, then came back to the US and retook the test while buying the insurance.

[mikeash]

Does the law even matter here? If it's illegal to discriminate, then the insurance becomes unprofitable and is no longer available. If it's not illegal to discriminate, then the insurance can remain profitable by jacking up the price, but then is no longer available to the vast majority of those who suffer from it.

Insurance really only works when either 1) what it covers is truly unpredictable or 2) everybody is required to participate regardless of whether they really need it.