Comments on: How the Market for Long-Term Care Could Be Destroyed http://www.john-goodman-blog.com/how-the-market-for-long-term-care-could-be-destroyed/ Insights on Health Care Reform | NCPA Fri, 10 Sep 2010 17:11:19 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: Guy Thomas http://www.john-goodman-blog.com/how-the-market-for-long-term-care-could-be-destroyed/comment-page-1/#comment-56047 Guy Thomas Tue, 23 Mar 2010 15:35:24 +0000 http://www.john-goodman-blog.com/?p=9484#comment-56047 Whoops those URLs again http://www.ma.hw.ac.uk/ams/girc/publications.php http://www.guythomas.org.uk/genetics/genetics.php Whoops those URLs again

http://www.ma.hw.ac.uk/ams/girc/publications.php

http://www.guythomas.org.uk/genetics/genetics.php

]]> By: Guy Thomas http://www.john-goodman-blog.com/how-the-market-for-long-term-care-could-be-destroyed/comment-page-1/#comment-56046 Guy Thomas Tue, 23 Mar 2010 15:34:00 +0000 http://www.john-goodman-blog.com/?p=9484#comment-56046 These posts are silly. None of you have done the math. The article quoted in the original post is contradicted by most other studies. Start here www.ma.hw.ac.uk/GIRC or here www.guythomas.org.uk/genetics.genetics.php These posts are silly. None of you have done the math. The article quoted in the original post is contradicted by most other studies.

Start here

http://www.ma.hw.ac.uk/GIRC

or here

http://www.guythomas.org.uk/genetics.genetics.php

]]> By: Virginia http://www.john-goodman-blog.com/how-the-market-for-long-term-care-could-be-destroyed/comment-page-1/#comment-55601 Virginia Thu, 18 Mar 2010 15:45:59 +0000 http://www.john-goodman-blog.com/?p=9484#comment-55601 This is the type of problem that really fascinates me. As genetic testing becomes more common and we learn more about it, I don't see how insurance companies can continue to function. More than that, I think that as we learn more about the human body and disease mechanisms, we're going to have a real social stratification between the genetically low-risk people and the high-risk people. But, ultimately, I think we're all huge risks for an insurance company. Imagine trying to insure 100 homes on the same block. Let's say that you know for a fact that some of the homes have faulty wiring. Of course you're going to charge more. Bad plumbing? That's another couple hundred dollars. The more thorough your review, the more information you have about which house will incur damages. And then you get to where you can pick one home and definitively say, "That home won't be standing in five years." Would you insure that home? I wouldn't if I were running a business. To go one step further, let's say that the resident left the blueprints to the home sitting in the garbage outside the house. All it would take is my reading through the blueprints to determine an accurate risk profile for the house. I would do it in a heartbeat. If we see adverse selection continue for long-term care insurance, there won't be much choice. Either all of the companies go out of business or legislators start leveling the playing field by allowing the inclusion of genetic testing. This is the type of problem that really fascinates me. As genetic testing becomes more common and we learn more about it, I don’t see how insurance companies can continue to function.

More than that, I think that as we learn more about the human body and disease mechanisms, we’re going to have a real social stratification between the genetically low-risk people and the high-risk people.

But, ultimately, I think we’re all huge risks for an insurance company.

Imagine trying to insure 100 homes on the same block. Let’s say that you know for a fact that some of the homes have faulty wiring. Of course you’re going to charge more. Bad plumbing? That’s another couple hundred dollars.

The more thorough your review, the more information you have about which house will incur damages. And then you get to where you can pick one home and definitively say, “That home won’t be standing in five years.”

Would you insure that home? I wouldn’t if I were running a business. To go one step further, let’s say that the resident left the blueprints to the home sitting in the garbage outside the house. All it would take is my reading through the blueprints to determine an accurate risk profile for the house.

I would do it in a heartbeat.

If we see adverse selection continue for long-term care insurance, there won’t be much choice. Either all of the companies go out of business or legislators start leveling the playing field by allowing the inclusion of genetic testing.

]]> By: Larry C. http://www.john-goodman-blog.com/how-the-market-for-long-term-care-could-be-destroyed/comment-page-1/#comment-55597 Larry C. Thu, 18 Mar 2010 15:15:17 +0000 http://www.john-goodman-blog.com/?p=9484#comment-55597 As we learn more and more about genes, the information will inevitabley be used to game long term care insurance. Eventually the plans will go into a death spiral in which (1) no one will be denied coverage because of a genetic condition and (2) no one will be able to afford the insurance. As we learn more and more about genes, the information will inevitabley be used to game long term care insurance. Eventually the plans will go into a death spiral in which (1) no one will be denied coverage because of a genetic condition and (2) no one will be able to afford the insurance.

]]> By: Devon Herrick http://www.john-goodman-blog.com/how-the-market-for-long-term-care-could-be-destroyed/comment-page-1/#comment-55591 Devon Herrick Thu, 18 Mar 2010 14:26:51 +0000 http://www.john-goodman-blog.com/?p=9484#comment-55591 Genetic testing can increasingly shed light on future health risks. People who want to prevent insurers from accessing genetic information may mean well. But don't understand how the market for risk works. Insurers who are asked to underwrite such risks need access to the same information enrollees have. Otherwise, over time this asymmetric information will destroy the insurance market as only those who expect to benefit will get coverage. For an event to be insurable, it needs to be rate and costly. But its likelihood of occurring in any given individual also needs to be unknown or is ceases to be an insurable event. Genetic testing can increasingly shed light on future health risks. People who want to prevent insurers from accessing genetic information may mean well. But don’t understand how the market for risk works. Insurers who are asked to underwrite such risks need access to the same information enrollees have. Otherwise, over time this asymmetric information will destroy the insurance market as only those who expect to benefit will get coverage. For an event to be insurable, it needs to be rate and costly. But its likelihood of occurring in any given individual also needs to be unknown or is ceases to be an insurable event.

]]> By: Tom H. http://www.john-goodman-blog.com/how-the-market-for-long-term-care-could-be-destroyed/comment-page-1/#comment-55587 Tom H. Thu, 18 Mar 2010 13:39:00 +0000 http://www.john-goodman-blog.com/?p=9484#comment-55587 This is what happens when you legislate that the market will have asymmetric information. That is, buyers get to know about their genes but sellers can't ask about it. This is what happens when you legislate that the market will have asymmetric information. That is, buyers get to know about their genes but sellers can’t ask about it.

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