Ezra Klein Writes – Hilarity Ensues

The Washington Post’s Ezra Klein is always dependable for incisive analysis of insurance issues. In his latest entry, he looks at the inequities of the individual health insurance market:

The individual market — which serves five percent of the population, and which is where the disruptions are happening — is a horror show. It’s a market where healthy people benefit from systematic discrimination against the sick, where young people benefit from systematic discrimination against the old, where men benefit from systematic discrimination against women, and where insurers benefit from systematic discrimination against the uninformed.

Let’s look at other insurance markets Klein could fix:

the auto insurance market – where old people benefit from systematic discrimination against the young, where safe drivers benefit from systematic discrimination against drunk drivers;

or perhaps,

the life insurance market – where young people benefit from systematic discrimination against the old, where women benefit from systematic discrimination against men.

What Klein and other commentators don’t realize is that the existence of underwriting rules in all insurance markets began in the time when the biggest issue that regulators had with insurance was the solvency of insurance companies. Insurance companies (and most weren’t for profit in the beginning) with inadequate underwriting rules went insolvent and no one’s claims got paid. That was the biggest regulatory concern.

I suppose that when we move to a single payer system, that will solve the solvency question, we’ll just raise taxes.