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Originally Posted by Je(^)plar
The problem with medical insurance only covering catastrophic occurances rather than maintenance is that it will cause people to avoid health care maintenance and hence you'll see a dramatic rise in medical catastrophes. An ounce of prevention is worth a pound of cure to be sure. If insurance isn't going to cover maintenance, then they damn well better put in incentives to receive maintenance.
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I think it's safe to assume such incentives will be there when necessary, but before getting to that I want to address another point. I don't think the benefits of prevention are as clear as you make it seem. I seem to recall, though don't have the figures in front of me, that total preventative care purchased today costs more than it saves in future spending (though perhaps this statement will require greater qualification when I come across the data again). The reason is that right now such care is often purchased frivolously, to the point where much of it is unnecessary and provides no real benefit, because patients are divorced entirely from the costs.
While obviously not all catastrophes are of the kind that can be prevented, I'll grant that because many can be, it's
possible that people might cut back on consumption of preventative care to the point that they make the need for such care more likely and more costly than what is saved. But given how much extraneous care is purchased today, I think it more likely that the market will find the better equilibrium than we see at present. (There are some factors here that I'm not addressing, such as the information problem in health care, but I think you'd see gains there as well if consumer-driven care was adopted.)
Be all that as it may, and getting back to the main point, of course the insurers will use such incentives where evidence suggests it can reduce risk. In fact, they are the only mechanism that really exists to take into account long-term cost considerations, so I see no reason why there need be any worry about this from a policy point of view. Insurance, by its very nature, takes this into account already.
The purpose of insurance is to cover risk. If someone is making their risk greater by not receiving proper care, insurers will charge them more. So long as there aren't any laws preventing price discrimination between people who engage in risky behavior and people who take better care of themselves, then the problem is not really a problem in fact. Don't want to get a check-up? Like smoking 2 packs a day? Expect to pay a higher premium.
11-17-2009, 09:28 AM
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