> It isn't insurance if the provider can't consider risk factors for the policy though.
Insurers are welcome to consider risk factors... for populations in aggregate.
It turns their actuarial models into population-subset models instead of individual models.
Which is easily the most "fair" (to individuals) option.
Allowing insurers to consider individual risk factors (preexisting conditions, genetics, etc.) would make the advertising data mining industry seem quaint. And I don't think any American wants to live in that world.
So we can talk about whether insurers should be able to offer lifestyle incentives (yes!), preventative care incentives (yes!), and be backed by catastrophic reinsurers (like mortgages, maybe)... but enrolling people blindly is one of the best things ACA did.
(Unless one happens to be young, rich, family-less, healthy, and have no moral compunction about fucking others over for ones own benefit)
Also, important unremarked benefit of ACA -- capping maximum insurer "administration" costs.
Firsthand from inside the industry as it was implemented, I can tell you that drove efficiency improvements inside insurers, as they couldn't bill for broken, slow, manual processes in additional premiums.
Granted, it caused other problems (attempts to self-deal and harvest profits through quasi-related provider / pharmacy entities or Medicare Advantage), but it did focus insurers on being efficient facilitators.
Where do you draw the line on individual vs population subset risk levels?
The insurer must decide what subset (s) of the population a person fits into, preexisting conditions are a factor that would almost certainly weigh heavily on the risk factor for that subset.
Are you proposing that it is irrelevant with regards to an individual's risk if they have diabetes, for example? Or are you simply arguing that we aren't comfortable with the costs it would require for an individual with diabetes to get health insurance if that factor is considered?
I fall into the latter personally and would prefer a real solution to health care that isn't some form of insurance. As long as it is insurance, though, the former seems impractical.
Insurance is a simple business: collect enough money so that in the long run you earn more than you pay out.
American health insurance generally does this in two broad ways. (1) Insure a large enough population group that averages hold and you can price based on actuarial/statistical probabilities. (2) Negotiate deals with provider groups so that they get something they want and you can bound their prices.
Neither of those things are contingent on knowing anything about individuals.
Insurers will generally pick {more randomly-selected customers} over {knowing more about each customer} any day of the week.
Maybe I'm misreading you, but you seem to want insurance that's accurately priced to exactly your circumstances and health (say, how custom high value property insurance is sold).
That doesn't solve insurer's concentrated tail risk problem though, and it means you're fucked if you ever develop a complicated condition, like cancer.
I have multiple actuaries in my family that work primarily in the insurance industry. I can assure you they are tasked with determining individual risk rather than risk of an entire pool of people with no regard for the individual.
It's also quite convenient that the contributor group (youngest adults with very little time spent to acquire wealth) are basically subsidizing the richest groups (older adults but still young enough to be on private health care).
It's effectively a regressive tax, transfer from the poorer to the richer, due to the way ACA caps the price spread.
Insurers are welcome to consider risk factors... for populations in aggregate.
It turns their actuarial models into population-subset models instead of individual models.
Which is easily the most "fair" (to individuals) option.
Allowing insurers to consider individual risk factors (preexisting conditions, genetics, etc.) would make the advertising data mining industry seem quaint. And I don't think any American wants to live in that world.
So we can talk about whether insurers should be able to offer lifestyle incentives (yes!), preventative care incentives (yes!), and be backed by catastrophic reinsurers (like mortgages, maybe)... but enrolling people blindly is one of the best things ACA did.
(Unless one happens to be young, rich, family-less, healthy, and have no moral compunction about fucking others over for ones own benefit)
Also, important unremarked benefit of ACA -- capping maximum insurer "administration" costs.
Firsthand from inside the industry as it was implemented, I can tell you that drove efficiency improvements inside insurers, as they couldn't bill for broken, slow, manual processes in additional premiums.
Granted, it caused other problems (attempts to self-deal and harvest profits through quasi-related provider / pharmacy entities or Medicare Advantage), but it did focus insurers on being efficient facilitators.