[FoRK] Adverse selection in insurance

Gordon Mohr gojomo at boxbe.com
Sun Oct 18 12:42:02 PDT 2009


Benjamin Black wrote:
> "Moreover, a significant proportion of individuals may be uninsured
> because many of them are charged high rates as a result of medical
> underwriting and many of them choose not to pay those rates."
> 
> This economist trickery of saying not that someone can't afford to pay a
> given rate, but that they choose not to pay those rates has worn quite
> thin.  If I have no money, I am not starving because I choose not to pay
> the going rates for food.  Market religion results in some very strange
> notions about how people behave and why.

Your objection may apply if someone is living hand-to-mouth.

But what if, instead of buying health insurance at going rates, some 
individuals are spending several times the cost of insurance on 
discretionary pleasures like first-run movies, cable television, video 
games, leisure travel, live events, or designer clothes -- or even 
gambling, tobacco, alcohol, or other drugs? What if others with the 
exact same income allocate it to health insurance instead?

*Then* can we economic tricksters and market religion true-believers say 
these individuals "choose not to pay those rates"? Or is there still an 
objection?

- Gordon


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