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POLICY: Adverse Selection, a young liberal’s learning experience

Sometimes I despair about the young liberals over at Ezra’s blog. Health care is so screwed up and they’re just discovering it. On the other hand they are discovering it and somehow figuring it out. Neil (the ethical werewolf) has written about Adverse Selection: A Big Problem with Private Insurane. Read the comments, ann you’ll notice a familiar name or two come up referring to the Wharton school of ecnonmic fantasy.

Still, good to find out that they are learning–I just wish they’d all been forced to read Enthoven, Fuchs, Evans et al so they don’t have to have it all explained again and again.

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  1. Linkmeister,
    Neil’s uninformed Liberal agenda attacking the free and open markets is tiresome to some of us too. You must really be tired by the President because he mentions HSAs in every speech. Lucky for you the Liberal media censors his comments so you won’t be so tired.

  2. Mr. Greiner, I didn’t intend to make an argument about your points. I merely wanted to point out that yet again you sidetracked Matthew’s discussion by flacking your products. It gets tiresome to some of us.

  3. Neil,
    If you think $48 a month is too much to pay for HSA qualifying health insurance may I suggest you move from Austin to Lansing, Michigan. In Lansing your premium would drop to $32.20 per month plus you would have a 24 month rate guarantee. Remember, with 25% combined Federal and State income tax, you would save $55 a month in taxes with a $2,650 deposit into your own savings account. Neil, wake up. I will try and explain this in a way that even you can understand. Let’s say you paid $32 for a pizza and the pizza delivery guy gave you $55 in change. Neil, can you afford to eat a pizza if you earn $23? Imagine this, you put $32 of gas in your car and $23 is credited to your VISA card. I know you don’t “think” you will get sick but I have to tell you that you come from a long line of dying people. I know you think that the rest of us don’t mind paying your medical bills if you get cancer but here again you are wrong.
    Bank Technology News is reporting today that tax free HSAs will surpass the total number of 401Ks. Don’t listen to Matthew or other Liberals or you just might be the last person in America without a tax free HSA. Matthew says HSAs are a minor deal but notice how Matthew was in the “first .005% of Americans” to go tax free with an HSA. Matthew was one of the first to go tax free with an HSA but he still refuses to admit that they are a little bit magical. Heck, Matthew had a tax free HSA before President Bush and Governor Jeb Bush. Of course I beat Matthew because my effective date is 1/1/97, the very first day.
    I always tell new tax free consumers, “Only listen to someone who had a tax free HSA on 1/1/97. Anybody else, like John Reynolds of Wells Fargo, is much tooo lethargic to pay any attention to.” That seems to work pretty well. Some of the first tax free HSAs have $50,000 balances. We pay 6% interest, tax free, so how much is that in additional savings every year? Neil I just don’t want you to be down on your knees of your heart begging a Liberal Democrat politician for a handout in retirement. Matthew won’t tell you the tax free HSA is the sword from the stone to protect you when you are old and crippled. Matthew has his sword to protect him but you don’t seem to know you want yours. Don’t listen to what Matthew says but instead “WATCH” what he does.
    Matthew is just jivin’ you Neil and you are falling for it. I told Matthew in my first email to him that the slighest breeze would blow his propaganda away and the HSA is like a hurricaine, level 5.” But of course now I have switched that to, “The truth is like Katrina, it blows the propaganda away.” I think that sounds better. I know the Liberals would have you think that you are not smart enough to have any money and they may be right. I submit Neil that you don’t have to be smart to be smart in the 21st Century, you just have to know who to trust. You can trust me Neil because I had my tax free HSA on 1/1/97 and am not quite as lathargic as everybody else. Like Groucho Marx said, “A 5 year old could figure this out. Hurry, somebody get a 5 year old.” Governor Jeb Bush said, “Floridians (you Neil) will be wise with their HSA balances.” You can trust Jeb Bush too Neil.

  4. Neil said individual insurance costs so much then posts links where he can get coverage for $48 to $100 a month. The average cost for group health employee insurance is over $4,000 a year for single coverage. Of course Medicaid for the poor costs even more. Government insurance is the insurance that costs so much. Notice how Neil won’t even try to defend his thoughtless post.
    No Liberals can defend what they say about health insurance. You all ramble on how the free markets are too expensive yet the free market produces Neil’s $48 a month premium. Name a government health insurance program that only costs $48 a month with a $2 million lifetime max, you can’t.
    Linkmeister, if you can’t come up with a reasonable arguement so you have to say I’m trying to sell something. All Liberals say that. It means nothing and I have never enrolled one Liberal from here yet, thank God.
    Matthew email me the name of these companies that are rating up insureds 1,000% – 2,000%. I don’t believe it. Here in Detroit the government is selling insurance to the poor (under $12 an hour income) for $168 a month with a $35,000 maximum benefit. Now that is expensive and dangerous insurance. But that’s what you could expect from the government. And if you quit working or get fired you lose your coverage without COBRA extension. That sounds illegal to me. It’s the 3-share program that Governor Granholm is talking about at the National Governors’ Association meeting this year.
    Like President Bush says, “Become empowered with a tax free HSA.” The HSA is part of the Ownership Society like the New England Journal of Medicine reported.

  5. So now Mr. Greiner has sidetracked yet another thread with his own sales pitch. I hope Neil comes back for an answer to his question about readings.

  6. Matthew,
    You live in the United States not Canada, sorry. In the US it is still legal for Neil to purchase HSA insurance for $48 a month even though you say the national average per person health claims are “about $5000.” As a matter of fact Matthew, you yourself purchased HSA health insurance for much less than $5,000 per year. You have went with HSA insurance because it’s the smartest move from the consumers’ Point of View (POV). But then you suggest that nobody else should when they are considering their options.
    I never said that individual insurance won’t decline coverage on some individuals. As a matter of fact again, I pointed out that Michigan law requires insurers to decline Michigan citizens for no good reason in some cases. I pointed out that a Michigan Republican, Jerry Zandstra, running for the U.S. Senate to replace Liberal Debbie Stabenow was declined by us because of Michigan’s stupid law.
    Don’t even discuss medical underwriting Matthew because I am much better informed on the subject. I also say you are wrong when you tell everybody that individual insurance companies are rating people up 1,000% or 2,000%. Please show me the study and the number of people who have such rate ups. We have had a rule with our company that clients can’t be rated more than 75% except in Iowa where state law demands no more than a 50% rate up. You should get your facts straight before you hoze everyone with your spin.
    Name the company that has a 1,000% rate up. You are the one that has the Blue Cross logos on your website under clients. I wouldn’t want to admit it either. How many millions of Americans have lost their Blue Cross employer-based coverage after they have been diagnosed? Never has one of my clients been terminated because of employee eligibility requirements. That’s basic math Matthew – Millions of Blue Cross health insurance terminations VS “0” Ron’s clients terminations. See the difference?

  7. Ron. You seems to have forgotten the argument you lost in these comments a few months back, when it was shown that companies just like yours (and like the Blues — who as I’ve told you have not been my clients in over 5 years, and who I’ve criticized many times on THCB) basically rejected anyone they thought might be expensive. Now you’re telling me that your company doesnt even when your own ads say “medical underwriting” required.
    Meanwhile, according to you we can all pay for the average health expenditure per capita in the US (about $5000) by buying a $1000 insurance policy. Did you go to math class in high school? No, I thought not.

  8. I feel sorry for you Matthew. These young liberals are really lost. Neil starts his uninformed article with “one reason it costs so much to purchase insurance as an individual.” Your posted article from the New England Journal of Medicine reported that individual insurance is less expensive than employer-based coverage in both large and small firms. The average cost for employer-based coverage is over $4,000 a year for single coverage. Neil links to ehealthinsurance and shows that he can get coverage for less than $1,000 a year in the free and open markets, he’s silly. ehealthinsurance has not stopped their bid rigging yet. That’s why I wonder why a rich guy like Steve Case would associate himself with people who are associated with ehealthinsurance. My question is, if you can’t trust ehealthinsurance can you trust Steve Case?
    Remember, ehealthinsurance quotes Golden Rule at preferred rates and Fortis at standard rates. Go to goldenrulehealth.com and prove it for yourself. Then ehealthinsurance adds on an option with Fortis to make the premiums higher still. Then ehealthinsurance won’t quote the lowest HSA plan from Fortis but will with Golden Rule. The lowest price for Neil for HSA insurance is $48.62 for “HSA Saver”. This plan has no coverage for doctor visits or Rx and Fortis RightStart HSA for $48.80 does have coverage for outpatient and Rx. But of course it is not quoted at ehealthinsurance because I can only assume they want to funnel their clients into other companies to get larger commissions.
    If Neil was in the 25% combined Federal and State income tax bracket and saved $2,650 a year in his tax free HSA he would save $$662 a year or $55 a month in income taxes. In other words, Neil would save more in taxes than the cost of his HSA health insurance. The tax savings is $55 a month and the HSA insurance cost is $48.80 a month. Plus, we pay 6% interest on his HSA deposit for even more savings. Tell me who is so broke that they can’t afford to save $7 a month after taxes?
    Matthew you posted over there that individual insurance will rate up pre-existing conditions 500% to 1000%. I have seen you post rate ups as high as 2000%. After 18 years of enrolling clients I have never had a client rated up more than 75%. In Iowa, by state law, it can’t be over 50%. I know you say Blue Cross of CA rates up these pathetic amounts but hey, these people are your clients and your present insurance carrier. You just need a better insurance company Matthew. But you just keep hozing these young liberals with your spin if you think it is important.
    Even in Detroit where Liberals rule the truth is coming out. The Detroit News has an opinion today about the death of the Liberal industrial welfare state. If Neil thinks government insurance is less expensive than the free and open markets he should remember NY is spending over $10,000 a year for each person on Medicaid. Really Neil, I know math is not your strong spot but which is cheaper, $10,000 a year or $48 a month? Dr. Neil Harl at ISU said, “If a reporter from the Des Moines Register wrote an article on HSAs they would be fired.” The Liberal media should do a story on President Bush’s HSA agenda for the poor. Of course the Liberal media with their propaganda and HSA censorship would not allow that. The propaganda in America is so bad it’s worse than NAZI Germany. Good luck to all of the Liberals but the truth will be coming out soon, sorry.
    http://www.detnews.com/2005/editorial/0510/12/A17-345598.htm

  9. I’m just a philosophy grad student who never took an economics class, so a lot of stuff is new to me.
    In the future when I can teach my own intro political philosophy classes, I plan to do a two-week segment at the end on designing public policy. (I’ll make room for it by not doing any Plato.) Adverse selection is one of the paradigm cases of something that I’d like to acquaint the the undergraduate population of a university with. It’s something that can be pretty quickly explained to a non-mathy audience, that bright kids won’t forget once they learn it, and that will raise a serious objection to the sort of facile consequentialist free-marketeering that infects a lot of public discourse.
    If you have any ideas about stuff that I should read (and that I can learn for myself without spending an excessive amount of time), or that I should teach, I’d like to get your advice.

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