One More Triumph of the Individual Health Insurance Market
posted by Frank Pasquale
We already know that the individual health insurance market (which includes about 18 million Americans) does a terrific job of rescinding the policies of those who get sick, if they happen to have made a small error on their original application. Now insurers are prying into pharmaceutical records to figure out whom to deny coverage to:
An untold number of people have been rejected for medical coverage for a reason they never could have guessed: Insurance companies are using huge, commercially available prescription databases to screen out applicants based on their drug purchases.
Privacy and consumer advocates warn that the information can easily be misinterpreted or knowingly misused. At a minimum, the practice is adding another layer of anxiety to a marketplace that many consumers already find baffling. “It’s making it harder to find insurance for people,” says Jay Horowitz, an independent insurance agent . . .
I wonder if efforts to stop this would count as the type of horrible regulation that Richard Epstein and David Hyman decry? Perhaps individuals looking for insurance can take some small solace in the fact that the discrimination occurs without respect to political ideology; for example, both Elizabeth Edwards and John McCain would probably be unable to find coverage in a world dominated by individual insurance.
July 24, 2008 at 5:54 pm
Posted in: Health Law, Privacy (Medical)
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Responses (6)
anonymous - July 24, 2008 at 6:52 pm
[B]oth Elizabeth Edwards and John McCain would probably be unable to find coverage in a world dominated by individual insurance.
Is insurance supposed to be a way of hedging one’s bets against uncertainty, or is it a form of welfare?
If the former, then there’s no problem. As scientific knowledge increases and detailed information about individuals becomes more readily available, the uncertainty about what medical issues one will have will decrease, and the logical endpoint is a system in which people know almost exactly what will happen to them and thus have no need for insurance (except to insure against things like freak accidents), and (1) no one who needs coverage will be able to get it, and (2) insurance companies will be unable to sell insurance to anyone.
In other words, there are people on the total opposite side of the health spectrum from McCain and Edwards who have no need for insurance, and the question is whether those people should be forced to subsidize McCain’s and Edwards’s medical expenses.
Daniel Goldberg - July 24, 2008 at 8:25 pm
anonymous’s depiction of the inherent (and apparently quite linear) progression of scientific knowledge towards certainty is quite inconsistent with quite a variety of conceptions of scientific method. So-called “medical information” is not only socially constructed (which is to say no more than that it is deeply influenced by social, cultural, and political contexts), but there is absolutely no reason to believe that the proliferation of such information is inherently likely to produce qualitatively more certainty.
scientific progress, as even the most basic attention to Kuhn and his progeny demonstrates, moves in a vastly more complex social arc, with numerous fits and starts — a puncuated equilibrium as it were — and ample undetermination. not to mention the value-laden nature of the endeavor — as any social practice must be.
Finally, epistemologies as diverse as later Wittgenstein and complex adative systems theory suggest good reason for being dubious of pretensions to scientific certainty. even as a thought experiment.
A.J. Sutter - July 25, 2008 at 9:42 am
The issue of “whether those people should be forced to subsidize McCain’s and Edwards’s medical expenses” was, minus a rhetorical twist or two (e.g., “forced”) resolved in the affirmative earlier in the history of health insurance. As detailed in Jonathan Cohn’s “Sick” (2007), the original health insurance programs were funded on the basis of “community rates,” which had the effect of healthier people in the community taking some responsibility for the welfare of the frailer ones by paying a flat rate. The business model of health insurance was changed to an actuarial, life-insurance one when the big life insurance companies decided to enter the business. But the community rate system wasn’t a case of people being “forced” to do anything. And actually, if people had more imagination about the possibility of their own health failing suddenly, instead of believing their current good fortune would last forever, people wouldn’t resent “subsidizing” their less fortunate neighbors.
anonymous - July 25, 2008 at 11:23 am
A.J. Sutter, thanks. Mr. Goldberg, I don’t mean to suggest that science will eliminate all uncertainty eventually or that the insurance companies’ risk assessment methods are perfectly scientific, but you seem to deny any correlation at all between availability of “medical information” and the ability to predict someone’s medical needs, which I simply don’t understand.
Daniel S. Goldberg - July 25, 2008 at 12:27 pm
anonymous,
I’m not sure how you read my comments to deny any correlation between medical information and prediction. What I denied was the positivist assertions in your comment that greater quantities of “medical information,” which itself is a deeply problematic and complicated concept, will inevitably lead to greater prediction models for health and insurance. There are excellent reasons for doubting this, and, if so, the premise for your conclusions regarding health insurance is flawed.
The existence of a correlation between greater information and prediction is not incompatible with denial of the positivist assertion; the subject of the inquiry is the nature, robustness, and persistence of this correlation, which you asserted would produce a “system” in which people know exactly what will happen to them healthwise.
no one with any experience in the actual process of insuring health risks would presume that such a vision is any more than that. it has little relation to the messy, uncertain world of health, risks, and disease causality that we inhabit.
anonymous - July 25, 2008 at 1:10 pm
Now you’re misreading my comments and obfuscating. I don’t see this going anywhere. Thanks again, A.J. Sutter, for the information.
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