What Are You Doing Right Now? (922 Viewers)
- Thread starter ßöмßäяðîëя
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I believe supply is an issue. From what I understand, this plan would create a barrier to entry for newer health insurance providers considering that only the main insurers are sponsored. This would actually create an artificial shortage, at least in general economic theory.
Average risk is quantifiable considering you're taking a large population and finding some sort of probability distribution for the population. The whole profitability model of insurance companies depends on the fact they can take a large number of people and only have to deal with an X number of cases.
At least in the car insurance field, it is quite certain that not everyone will be involved in an accident on the same day. If so, then these firms can plan for paying out X amount of money per day based on covariance models. They minimize risk by using a normal distribution on what happens day by day, and adjust their rates accordingly. So since accidents are a low probability and low payout event, they can be profitable.
Not sure how it works with health insurers, but I imagine their risk models are somewhat similar.
Not sure if this is true, but I'll take your word for it.
I guess we'll see how it turns out. I know very little about the healthcare industry. But generally speaking, I don't consider healthcare reform to be as important as building a sustainable economy through savings and investment and eliminating fraud in our banking industry.
Average risk is quantifiable considering you're taking a large population and finding some sort of probability distribution for the population. The whole profitability model of insurance companies depends on the fact they can take a large number of people and only have to deal with an X number of cases.
At least in the car insurance field, it is quite certain that not everyone will be involved in an accident on the same day. If so, then these firms can plan for paying out X amount of money per day based on covariance models. They minimize risk by using a normal distribution on what happens day by day, and adjust their rates accordingly. So since accidents are a low probability and low payout event, they can be profitable.
Not sure how it works with health insurers, but I imagine their risk models are somewhat similar.
Not sure if this is true, but I'll take your word for it.
I guess we'll see how it turns out. I know very little about the healthcare industry. But generally speaking, I don't consider healthcare reform to be as important as building a sustainable economy through savings and investment and eliminating fraud in our banking industry.
