Here's a story that goes to the heart of the subject that fuels the lengthiest and most contentious comment threads here at LITD.
California's insurance commissioner is pushing legislation that would greatly weaken the state's small businesses' ability to offer employees stop-loss self-insurance, a type of coverage for which insurance companies have seen a growing market. In other words, he and those in his camp want to increase an employer's payout obligation in a claim, the effect of which would be to drive empoyers into the kind of "diverse-risk-pool" programs that FHer-care is steering the country toward.
What comes up in the comment threads here when the discussion turns to health insurance is the notion that it is somehow unfair or unjust for insurance companies to cultivate pools of policyholders that are generally in pretty good health. What never gets answered in these arguments is where an insurance company - or, if we continue to move toward a socialistic model, the government - is supposed to get the money to cover the unprofitable part of its business.
The rejoinder to those who denigrate the free market, who characterize it as some kind of lawless wild west in which strong predators hold sway over everyone else, is to point to the fact that the market works anyway, whether it is freed up to do so by public policy, or hampered by attempts to thwart it. As economist Mike Shedlock points out in the linked column, businesses are leaving California in droves because of "fairness"-based nonsense like this. And that leaves an ever-scrawnier tax base, and then what happens to all those wonderful public services?
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