Medical Underwriting

Tuesday, September 11th, 2007

I’ve been advocating this for a few years, now.

I’m not really sure why there’s a controversy. Insurance is the pooling of risk. People who pose a high risk to the pool should have to pay more to be insured. There’s no reason why health insurance premiums shouldn’t vary by risk just as life and auto insurance premiums do.

Now it may be, as I’ve been suggesting, that carrying a few extra pounds isn’t all that bad for you (and might actually be good for you). If that’s the case, insurers and employers will adjust accordingly. It may be that I’m wrong.

But when it comes to nutrition and lifestyle choices–figuring out the ideal weight, as well as what may be the best way to encourage people to achieve that weight–I’ll far sooner trust the collected wisdom of markets than I’ll trust the same small circle of self-appointed public health experts we see quoted over and over again.

The incentive for insurance companies is profit. That means figuring out a carrot/stick approach that keeps people healthy, and out of the hospital. For employers, it’s low premiums balanced by enough room for personal choices that employees are happy, and don’t look to other employers offering a health plan with more choices.

The incentive for public health researchers, on the other hand, is publication. For public health activists, it’s political power. That means trumpeting the most alarming, dire, and/or headline-grabbing research and interpretations of data. Because that’s what gets published, interests newspapers, and attracts public attention. Attention-grabbing studies get public health researchers more grants. Ratcheting up hysteria helps public health activists implement their agenda.

Ask yourself: to which if these two systems of incentives would you entrust your health?

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