More on Health Care Reform

In most cases, insurance is something you buy to cover yourself in case the unexpected financial setback occurs–damage to your house or car for example. Or in the case of health, an acute illness or event such as a stroke or heart attack. On the other hand, you  can and should expect to have some routine preventive care like physicals, vaccinations, periodic blood tests or various scans depending on your age and gender. While the high cost of treating acute illnesses is something few people can absorb absent insurance, the routine tests could be afforded by some to many people. Still, insurers are generally happy  to cover payment for the preventive care because, at least in theory, that may lower the risk of the much more expensive acute care. How likely it is for an individual to need the pricier care is what makes the risk pool definitionand the pre-existing condition issue a driving concern in the health care debate.

The theory of insurance is that among a large group of people, only a relatively small percentage will suffer very severe ailments necessitating very costly  medical treatments. Accordingly, the risk-based premium set for the members of the group of insureds can be set low enough for the premiums to be affordable (much more affordable than risking one’s own bank account). Of course, this means that if you are very healthy, you are subsidizing sicker people’s medical care. On the other hand, if you are the sickly one, you have other people paying for you. Still, I for one would rather help someone else pay their medical bills than be sick myself and make out better financially. In any case, a major component of the health care reform debate focuses on preexisting  conditions.