[FoRK] Adverse selection in insurance

J. Andrew Rogers andrew at ceruleansystems.com
Mon Oct 19 01:07:35 PDT 2009


On Oct 18, 2009, at 11:02 PM, Benjamin Black wrote:
> Yes, pity, the poor, put upon insurance companies who can't afford to
> spend millions on lobbying legislatures to get exactly the regulations
> they want passed, often having written them for the legislators.


Congratulations, you've discovered regulatory capture.  The real trick  
is understanding it and learning how to avoid it, but I'm not sanguine.


> Instead, the people of the states have risen up to smite them with  
> their
> awesome democratic power.  Give it a rest.  The notion that insurance
> companies, working hand in glove with the health care providers and  
> big
> pharma, are victims rather than perpetrators is ludicrous.


The people used their "awesome democratic power" to make it possible,  
practically begged for it. The special interests were all too happy to  
oblige.  I'm hoping that the people will learn this elementary lesson.  
Some day. Eventually.


> The companies in these industries do not want reform because the  
> system
> we have works extremely well for them.  Those rent-seeking special
> interests?  They're the health care industry.


And the people voted to allow this.  Clearly a trustworthy lot when it  
comes to important decisions involving the design of economic systems.


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