quote:
Do I think health insurance companies should be able to adjust premiums based on new risks due to something like cancer, that may be no fault of the person insured? No.

Then how do those claims get paid in the future? As new information is gathered risk assessments are adjusted and actuaries use that data to set rates.

If you can't adjust your pricing due to risk then it's not insurance.

Auto insurance and health insurance are actuarially the same. You may not think so and that's OK.

The process of setting rates is identical.

Most of what insurance companies are paid to do is actuarial in nature. That's what they are paid to be really good at at the end of the day.

We'll have to agree to disagree. By the way, my insurance career began in underwriting. I'm just dangerous enough to question actuaries but not smart enough to challenge their final word.

Actuaries are terrible people as a rule by the way.

This post was edited on 9/21/17 at 11:03 am

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Posted by SUB

Member since Jan 2001

Member since Jan 2009

21051 posts

Posted on 9/21/17 at 11:27 am to roadGator

quote:
They are identical in the way premiums are set.

If you are talking about risk as a whole, then yes. But the risk factors used are very different, no?

quote:
If you can't adjust your pricing due to risk then it's not insurance.

Definition of insurance is "a practice or arrangement by which a company or government agency provides a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a premium."

Now, I understand that an insurance policy may provide for premium adjustments in the event of loss, damage, illness, etc, but all I'm saying is that I don't think it's right to adjust for certain factors. I'm paying for protection from getting a serious illness, and what you are saying, is that there is no guaranteed compensation for an illness, since insurers can just adjust premiums to whatever they see fit based on new risks. That isn't insurance. That's a subsidized health plan. It's not protection if my premiums can be extremely increased if a serious event occurs at no fault of my own.

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