tag:blogger.com,1999:blog-8914063486189106024.post227202428171766699..comments2022-12-05T01:49:09.035-05:00Comments on The Rollins Financial Blog: Y2K10 UpdateRollins Financial Advisors, LLChttp://www.blogger.com/profile/02086309052329953428noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-8914063486189106024.post-14605811095482963332010-01-09T16:18:40.890-05:002010-01-09T16:18:40.890-05:00I am glad to see the “From the Desk of Joe Rollins...I am glad to see the “From the Desk of Joe Rollins” blog back in action! I finally got a chance to sit down and read the latest blog and decided I had better put my secondary education to use and respond to the following paragraph in the blog:<br /><br /><i>I don’t know what economic textbook Washington reads, but the new health care proposal only represents their lack of economic knowledge. Quite simply, the goal is to cover 35 million Americans who currently don’t have health care benefits. Additionally, the government is requiring the insurance companies to cover everyone regardless of pre-existing conditions or medical history. Most importantly, everyone’s health insurance will cost the same regardless of age, health conditions, and other environmental matters. With all of these new requirements for the insurance companies, the government says that the cost of medical insurance will decrease. If you try to teach that type of economics in college, even the students would laugh at you.</i><br /><br />Well, rather than laughing, this student would look at this argument with a critical eye. <br /><br />Assuming the statements above regarding new requirements on insurance companies are factual and that claims of reduced medical insurance costs have been made, my reaction would include the following thoughts:<br /><br />If costs of medical insurance will be “universal,” then that would mean that there must be some balancing of costs, and some individuals would experience an increase in cost of insurance and some would experience a decrease in cost of insurance. <br /><br />If insurance companies will be required to insure those now without insurance due to “cherry picking,” or accepting only customers with lower expected loss, then you can expect insurance premiums for those now insured to increase.<br /><br />However, if those uninsured individuals with high expected medical loss are currently seeking treatment without insurance and not paying (at least) for their medical care they are receiving, then the cost of production for medical care providers must increase to include the loss when rendering services for free or discounted price to these uninsured. When these individuals are insured and medical care providers are being paid full price for all services rendered, they do not have to factor free or discounted services into their cost of doing business and the price of medical care can be reduced.<br /><br />Finally, according to several studies, only a very small fraction of the uninsured are uninsured because of denial of coverage due to pre-existing health conditions and furthermore, the typical uninsured person in the United States is young and relatively healthy. If this is true then, you can assume that their expected loss could be less than the typical currently insured person. Since insurance premiums are a function of average expected loss, adding individuals with less expected loss to insurance plans will decrease the premiums for everyone in the plan.<br /><br />So all in all, it is not clear to the critical eye with a cursory glance and without much more detailed information if this situation would increase or decrease the cost of medical insurance.<br /><br />Cheers!<br />Cassiecassie elderhttps://www.blogger.com/profile/02934911643044695190noreply@blogger.comtag:blogger.com,1999:blog-8914063486189106024.post-36238405387605191042010-01-08T14:33:50.936-05:002010-01-08T14:33:50.936-05:00Brilliant. Joe, you (and your team) sure know how ...Brilliant. Joe, you (and your team) sure know how to 'splain things. Thank you! I'm going to Tweet this blog out to 1800 people right now. <br /><br />Best,<br />JamieJamie Turnerhttp://www.60secondmarketer.comnoreply@blogger.com