Monday, October 19, 2009

The Echoes of "Duh!"

The concept of insurance is so simple. You join a group and pitch in some money. The idea is that if something bad happens to you there would be difficulty paying the costs. But the probability is fairly low that it will happen. Obviously it will happen to someone at some time, but if everyone contributes to the pool when the bad thing comes to one person, the pool will cover the cost.

No pool? No coverage! High risk of many members having the problem? High cost! That's Insurance 101.

These are reasons why Medicare has everyone who works pay into a mechanism which will provide healthcare payments for those over 65. Lots of payers, relatively few recipients. There are also reasons why rational insurance companies try to reduce risk in their pool by not accepting folks with pre-existing conditions. If you try to buy medical insurance when you've got Stage III lymphoma, you probably will cost them a lot of money.

Why then is this a surprise:

Colorado Insurers Say This Will Hurt!

Yet, despite the utter simplicity of the concepts, we still have folks who don't get it. In case you were already gagging and couldn't read through to the last paragraphs of that piece, here they are:

Despite conflicting analysis on whether the current proposal would cut health care costs, Arvada resident Peggy Woodward is confident it would save her money.

Woodward, who was laid off from her telecommunications job a year ago, is about to cancel her health insurance because she can't afford the $223 monthly premium. Under the legislation, she would qualify for a subsidy of about $2,000 per year.

"That's a very significant savings for me," she said. "I do hope they pass it just as soon as possible."

First, I would have to ask why the Denver Post saw fit to ask Peggy Woodward about this? What is her expertise? Why does her opinion have relevance?

Second, notice that discussion of actual cost of a product (healthcare) is not part of her math. She can't afford $223/month. So what? The "legislation" which hasn't been written yet has her believing she would qualify for a subsidy of $2000/year. How does she divine that? Does her "qualifying" require her to still be laid off? No info given.

Third, who really cares if "that's very significant" to her and what she hopes...oh, that's it. She "hopes" for "change" she can believe in! And Santa Claus, the Tooth Fairy, the Easter Bunny and free cake and balloons for every one.

I guess the Denver Post considers Peggy a counter-balance to the executives of the insurance industry who are encumbered by facts and a bottom line.

Fair and balanced!

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