Miss­ing piece of Oba­maCare

The Covington News - - Front page -

The health care de­bate is not help­ful when it in­cludes charges of racism and “ ci­ti­zen con­cern” over fu­ture deficits. What is be­ing lost in all that “ noise,” to use a gen­er­ous term, is a ba­sic un­der­stand­ing of how in­sur­ance works.

At its heart, in­sur­ance is about shared risk. For any group, we can project how many peo­ple will get sick, be di­a­bet­ics, get the flu, give birth, etc., in any given year. Some will need very lit­tle med­i­cal ser­vices, some will need a lot. But in large enough num­bers, the cost of cov­er­ing all the ser­vices that any of us will need works out to be quite af­ford­able per per­son.

Con­sider the group health in­sur­ance rates for a large em­ployer. Those rates are lower than any­thing you or I can get as in­di­vid­u­als. Why? With a large group the cost per per­son aver­ages out over the group.

Some of us will need med­i­cal ser­vices but a lot of us won’t. With a group com­posed of every­one in the United States, uni­ver­sal health cov­er­age would work the same way.

Health in­sur­ance com­pa­nies are mak­ing money so it is a busi­ness that could pay for it­self ( read: no new taxes). Pub­lic in­sur­ance could of­fer a ba­sic health cov­er­age plan with op­tions for greater cov­er­age, at higher prices. Spread­ing the risk over the largest pool of peo­ple avail­able, should re­sult in lower av­er­age cost for ba­sic cov­er­age.

The na­ture of shared risk for in­sur­ance does not change with a pub­lic op­tion. How should in­sur­ance for all of us dif­fer from in­sur­ance for some of us? That ques­tion sets the stage for an in­formed de­bate over health care re­form.

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