i hear this from the left, all-the-time usually wraped in a bundle of other emotional arguments against private insurance, and for the destruction of the insurance industry.
I've read Hoppe's article on insurance, and its important to know the austrian view on insurance.
So from my understanding there would be a very good reason why an insurance company would deny coverage to some people, or deny certain kinds of coverage. If i found out the company i get car insurace through, did not deny coverage to 15 year olds i would be horrified, for example.
If an insurance agency discriminated against someone with genetic information that would suggest they have a 90% chance of developing cataracts, maybe it makes sense to deny them full vision coverage, as long as they are pooled with other people with clean vision.
of course, i'm not convinced of the validity of the left's claim on this subject, for all i know they could be lying or severly misleading, again.
do we get free cheezeburger in socielism?
Can you link to Hoppe's article?
http://www.lewrockwell.com/hoppe/uncertainty-insurance.html
I'm gonna wing this one. If a driver has a 90% chance of getting into an accident, what sense does it make to insure the driver? In other words, say that if the driver had a 90% chance of getting into an accident, within 5 years, that resulted in $100,000 in damages, the insurance company would essentially have to charge the driver $100,000, within the 5 years, for the insurance. That is, the driver would have to pay $20,000 every year for insurance. However, most drivers can't afford to pay that much every year. If there was only a 45% chance of an accident, then, perhaps, the premium would only be $10,000 a year. Anywho, the driver would get denied insurance becaue he couldn't afford to insure himself.
If what I described is near the reality of the insurance industry, then the situation must be worse for poor people who live in high-crime areas. Since a person in a high-crime area is very likely to be the victim of a crime, then at some point, the potential victim is going to have to pay the replacement cost of what is being insured. In other words, if the replacement cost of an automobile is $20,000, and the automobile has a 90% chance of being stolen, then the cost to insure the automobile would be very near the replacement cost, plus profit and other expenses that the insurance company would incur.
So, in conclusion, it doesn't make any sense to insure against anything that is almost guaranteed to happen. Furthermore, socialized insurance, beside from making people more careless/reckless/etc., only spreads the costs of insurance to those who would otherwise have a lower premium, while lowering the premium for those who would otherwise have a higher premium.
To paraphrase Marc Faber: We're all doomed, but that doesn't mean that we can't make money in the process. Rabbi Lapin: "Let's make bricks!" Stephan Kinsella: "Say you and I both want to make a German chocolate cake."
The only truth in that article is at the bottom of the right column. Unrestrained greedy capitalism really is AIDS.
No, the mental affliction plaguing you is what is akin to AIDs. Bye bye.
Freedom of markets is positively correlated with the degree of evolution in any society...
huh? wuh?
Where there is no property there is no justice; a proposition as certain as any demonstration in Euclid
Fools! not to see that what they madly desire would be a calamity to them as no hands but their own could bring
I think the person with 90% chances and such will in fact still get insurance, but that such insurance would be generally higher (much higher) than a person who would have only a 50% chance, and so on. What this means is that since you can still quantify the odds of the disease or accident, it still is in the advantage of the insurer to considering covering that person with a higher "misfortune odds" as there will be similar people (with similar odds). In many ways, this is more fair as it prevents those who were at less risk or lower odds for given events will not pay to cover those with higher odds. Also, it would incentivize to find means to lower one's odds in terms of these events or future conditions (in the case of the person with a near certain chance of cataracts, might in some future be paid to replace his/her eyes with synthetic ones or possibly regrown ones with genetic modifications). So, this also produces a means for those with higher odds to seek mitigations. Thus, improving their future conditions or avoiding the given future events.
"The power of liberty going forward is in decentralization. Not in leaders, but in decentralized activism. In a market process." -- liberty student
fezwhatley: If i found out the company i get car insurace through, did not deny coverage to 15 year olds i would be horrified, for example.
Why?
At most, I think only 5% of the adult population would need to stop cooperating to have real change.
Guys, the whole point of insurable events is to be able to know the risk for a class of people but not for individuals. So the question is off point. Of course an individual with a 90% chance of developing cataracts will either be denied coverage, or only get covered at a much higher price and pooled with people of similar risk. Point being they can still save that 10% on costs if the company does it's job right.
And to answer critics of this fact, you're just describing what happens. If people want to mandate coverage for conditions they're welcome to. That doens't negate the economic consequences of doing so. What they're doing is holding up the inevitable economic consequences of screwing with insurance risk tiering, high prices or denied coverage, like it's your fault or something. What you have to explain to such people is that the laws of economics, like gravity, don't just go away because you want them to or find them inconvenient. You're no more guilty of causing the higher prices and/or denied coverage than a physicist is of murder if he explains to someone before they step off a cliff that doing so will cause them to fall and stop short and die from the impact.
Unfortunately, most people don't think that way about economics. To them, if a regulation or restriction is considered necessary, ethical, and/or moral, then it is also negligible vis a vi economic consequences. Viola, the current housing crisis. Poor people should have houses too! It is the moral, ethical, and necessary thing to do to make sure they have access to the same housing options as the rest of us. Therefore when the economy collapses because at its base are a boatload of worthless IOUs in the form of questionable mortgages, it's not all the regulations and moral hazzard the government created that's to blame. It's the bankers and capitalism that are to blame. Neither obeyed 'the will of the people'. Because, in the minds of most people, these things are a simple matter of obedience. Inevitable consequences are simply not a part of their mental framework when it comes to economics.