Thursday, November 24, 2011

assurance clubs and Universal condition Care

Insurance associates serve a very important function in our society. The purpose of assurance is to share risk. Risk is the number of economic loss that person is willing to assume in an activity. For instance, a bank would not loan money for the purpose of buying a house, unless the house was protected against losses such as fire, wind and other perils. That security is in case,granted by a Homeowner's policy.

A loan to buy an automobile would not be ready unless the car was insured for losses by theft or collision. That security is in case,granted by an auto policy.

Health Care Reforms

Health assurance is a policy that shares the risk of losses caused by injuries or illness. A share of the risk is assumed by the private through a deductible or co-pay. In-other-words, if person visits the doctor, that private may be required to pay the first or of the visit. The condition assurance business assumes the risk of the remainder of the cost.

assurance clubs and Universal condition Care

That shared risk comes about through an change of 'consideration'. Notice is value. The insured pays a excellent in change for the promise of the assurance business to pay sure costs associated with the insured's condition care. Which brings us to the controversy surrounding the government's efforts to manufacture what some call universal condition care.

No matter what side of the consulation you are on, in favor or against universal condition care, one issue has been settled. President Obama stated publicly that it is impossible to insure the 'uninsured' without added costs. So, the idea that this will be a 'deficit neutral' policy has been debunked by the supervision itself. Whether taxes go up to pay for the program, or condition care will have to be rationed to keep costs neutral, or bring them down.

In response to the group out-cry about a government condition care program, the supervision has called the assurance associates villains. After all, assurance associates exclude preexisting conditions for some duration of time when an private enrolls (however that is not always the case with group policies), and assurance associates are production a 'profit'.

PreExsiting Conditions

Think about the understanding of risk and preexisting conditions. An private has a home that has been damaged by fire. Would a homeowner's assurance business now write a policy that would cover the repairs to home caused by the preexisting fire? Of policy not! That is not shared risk, that is bad business.

An private has a preexisting condition condition, say diabetes. Purchasing a policy that would exclude the treatment for diabetes for a slight duration of time (usually two years), now results in a shared risk. The condition assurance business will cover the person for other perils, and if that private pays the premiums over time, that exclusion regarding the preexisting condition is then dropped.

Is it inherent for the government to insure every person in the United States and force assurance associates to provide policies without regard to preexisting conditions? It is possible, but not without driving the cost of health-care way up. After all, the money to pay the doctors and hospitals have to come from somewhere and President Obama stated that 'We are out of money'. Since the government doesn't earn money, its only source of wage is taxes.


Insurance associates are being cast as the bad guy since associates make a profit. Which do you prefer, associates that are well run that make a profit, or a business like normal Motors that required billions of dollars of taxpayer money to bail the business out? A profit is what allows associates to strengthen services and provide jobs. associates that fail to make a profit, go out-of-business.

The government not only fails to make a profit, as a well run business entity should, it runs at a deficit. The newest example is Cash for Clunkers. Not only was taxpayer money used to subsidize auto sales, now car dealers are complaining that the government is not sending the checks for the Clunkers that were promised. It appears that many buyers will have lost their old cars and now face repossession of the new cars purchased since the money for the schedule did not well exist.

This does not bode well for a government run condition care system.

Tort Reform

Doctors and hospitals must custom defensive medicine. Population will sue for anything. Tort lawyers use a 'shot-gun' approach when filing a malpractice lawsuit. All doctors, nurses, technicians and hospitals complex in a case are named as a defendant, Whether that party had any actual responsibility for the claimed injury and damage.

We need a loser pay system, which provides that whatever who brings a lawsuit and loses, is required to pay the other side's attorney fees and expenses. That would do away with most frivolous lawsuits and bring the costs of condition care down.

Big Government Solution

Government should be required to live within its means. It does not, and the government, not assurance companies, is the villain in this scenario.

The founding fathers did not foresee a large, grand centralized government. That is what was the war of independence against England was all about. The Us Constitution delegated exact powers to the Federal Government, and it does not specify taking over any hidden sector industry.

Medicare and Medicaid are government condition care programs on the verge of collapse. Even President Obama admits Medicare cannot be sustained. No schedule can be sustained when it runs at a deficit and all government programs run at a deficit.

Universal condition Care will run at a deficit from day one and that is just bad business.

assurance clubs and Universal condition Care

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