Health Insurance

A very interesting posting by Richard Posner, who is a justice on the federal 7th Circuit Court of Appeals, and a professor at the University of Chicago. He has largely defined the field of law and economics over the last few decades.

The posting is overall very interesting, but particularly note the following quote:

Third-party payment is a pervasive feature of American medicine. Why anyone should want health insurance other than “major medical”—that is, insurance against catastrophic medical bills—is a great mystery, as is the fact that Medicare subsidizes routine health care of upper-middle-class people. Since disease and injury tend to be unpredictable, health insurance smooths costs over time, which is efficient, but a person could achieve that smoothing simply by saving the money that he now pays in health-insurance premiums and investing it to create a fund out of which to pay future health expenses as they occur.

But we are stuck with third-party payment, and it systematically favors specialists over primary-care physicians, because specialists tend to provide discrete procedures, which are easier for the insurers, whether they are private insurance companies or government, to cost. The care provided by primary-care physicians has, to an extent, an elastic and discretionary quality.

It would be interesting to see how our actuarial science and insurance
students would respond to this.

- Rick

WC in Illinois

I know it's hard to believe that my home state of Illinois might be the site of possibly fraudulent activity... Here's an editorial from today's Champaign News-Gazette regarding a Workers Compensation situation that some are apparently suspecting to be questionable.

- Rick

Births, Marriages, and Divorces

A NY Times report on a National Center for Health Statistics study indicates that U.S. birth, marriage, and divorce rates all fell slightly during 2009. The 100-year births-per-year graphic is nice - for example, one can see what happens to the birth rate during recessionary or expansionary periods.

- Rick

Cost of Motor Vehicle Crash Injuries

A recent study by the Centers for Disease Control and Prevention, as reported in Insurance Journal, finds that the annual medical care and productivity costs associated with motor vehicle crash injuries totals over $99 billion, or nearly $500 per licensed U.S. driver.

- Rick

Life Expectancy After Retirement

Here is a nice chart showing, for several countries, the increase in life expectancy after retirement over the last roughly 40 years. Important data for anyone discussing whether or not to increase retirement ages necessary for full benefits.

- Rick

Boys versus Girls

Today's (February 18) Chicago Tribune (page 25, first page of the Business section) has an article titled "Teen Risk Gap Shrinks" (link here). According to the article (which references a new Allstate Foundation report), the gap between teen boys and teen girls in terms of driver risk has been diminishing. Historically, teen boys have been much riskier drivers, and more costly to insure, than teen girls -- but that gap is now characterized as narrowing.

Although... The article keeps referring to teenage girls as "admitting to" speeding, texting, etc., more often than teenage boys. It will be interesting to see whether this survey-type data, which I would think depends upon the honesty of those surveyed, is ultimately borne out by future emerging loss data...

By the way... It still shocks me that anyone would even think about texting while driving. It perhaps shocks me even more that we often have to engage in societal arguments about whether or not it should be illegal...

- Rick

Using the Terminally Ill Against Insurers

In Tuesday's (February 16) Wall Street Journal, page A1, there is a very interesting article titled "Investors Recruit Terminally Ill To Outwit Insurers on Annuities." Well worth seeking out for actuaries and actuarial science students.

We certainly seem to be in an environment these days in which anything goes against the "big, bad" insurers...

- Rick