[Draft] Spiralling Out of Control

[Electrum]

An issue on health insurance death spirals. I know, an absolutely riveting thriller of a topic.

Issue: Spiralling Out of Control

[desc] Young and healthy @@demonymplural@@ are dropping their health insurance in droves as their premiums have been increasing faster than inflation. Without further action, experts say that the insurance industry will collapse in what has been dubbed the "death spiral".
[validity] low levels of insurance, developed country, capitalist

[option]"Healthy people are finding that the costs of health insurance far outweigh the benefits," explains insurance actuary @@randomname@@, as @@he@@ looks up your probability of death in the coming year on a mortality table. "Those who continue to have health insurance are more likely to be ill, increasing our average costs per person. We have to pass on these costs as higher premiums, which only strengthens this vicious cycle. To fix this, we need to encourage "
[effect]the first question asked in insurance questionnaires is 'ASL?'

[option]"Thou must smite the insurance industry completely!" beseeches @@randomname@@, as @@he@@ waggles his finger at you, while slowly shuffling into the room on @@his@@ walking frame. "Ahem. Sorry, that was a bit dramatic. All these companies want to do is line their pockets with our money, even though we have paid insurance our entire lives! Send these rascals a message by creating a taxpayer-funded national health service instead. No need for us to deal with a profiteering middleman, and you will get that warm fuzzy feeling of helping us people of age."
[effect]health insurers have become bankrupt because they didn't take government intervention insurance

[option]"Can't you see it's these doddering old fools that are the problem?" asks your brother, as his nose is upturned because of the 'old person smell'. "The reason why we pay so much for insurance is because all the old retirees keep dying. Let's say, however, that when old people stop being productive members of society… we give them a permanent retirement before they start needing insurance payouts. You'll save the insurance industry and as a side bonus, you'll be able to save a few @@currencyplural@@ in welfare payments."
[effect]odour-eliminating soaps are suddenly popular amongst the elderly

Issue: Spiralling Out of Control

[desc] Healthy @@demonymplural@@ have dropped their health insurance in droves because of their low risk and years of increasing health insurance premiums. Without further action, experts say that the insurance industry will collapse in what has been dubbed the "death spiral".
[validity] no national health cover, low levels of insurance, old people

[option]"It is mostly the very sick that are signing up for health insurance these days," explains actuary @@randomname@@, as @@he@@ calculates your life expectancy based on your weight and smoking status. "Without healthy people contributing, the health insurance industry is going to be bankrupt. Allow us to charge different prices to people based on a genetic sample and their responses to our extensive questionnaire. That way, we can work out who is healthy and give them discounts to continue paying insurance."
[effect]the first question asked in insurance questionnaires is 'ASL?'

[option]"Thou must smite the insurance industry completely!" beseeches @@randomname@@, as @@he@@ waggles his finger at you, while slowly shuffling into the room on @@his@@ walking frame. "Ahem. Sorry, that was a bit dramatic. All these companies want to do is line their pockets with our money, even though we have paid insurance our entire lives! Send these rascals a message by creating a taxpayer-funded national health service instead. No need for us to deal with a profiteering middleman, and you will get that warm fuzzy feeling of helping us people of age."
[effect]health insurers have become bankrupt because they didn't take government intervention insurance

[option]"Can't you see it's these doddering old fools that are the problem?" asks your brother, as his nose is upturned because of the 'old person smell'. "The reason why we pay so much for insurance is because all the old retirees keep dying. Let's say, however, that when old people stop being productive members of society… we give them a permanent retirement before they start needing insurance payouts. You'll save the insurance industry and as a side bonus, you'll be able to save a few @@currencyplural@@ in welfare payments."
[effect]odour-eliminating soaps are suddenly popular amongst the elderly

[Jutsa]

Oh thank goodness something to tackle low insurance industries.

[Electrum]

Bumperooni

[Frieden-und Freudenland]

A
[effect]the first question asked in insurance questionnaires is 'ASL?'

You mean ALS? ASL is American Sign Language AFAIK.

[option]"Can't you see it's these doddering old fools that are the problem?" asks your brother, as his nose is upturned because of the 'old person smell'. "The reason why we pay so much for insurance is because all the old retirees keep dying. Let's say, however, that when old people stop being productive members of society… we give them a permanent retirement before they start needing insurance payouts. You'll save the insurance industry and as a side bonus, you'll be able to save a few @@currencyplural@@ in welfare payments."

I am not sure I understand the logic of this option.

[Auphelia]

[option]"Can't you see it's these doddering old fools that are the problem?" asks your brother, as his nose is upturned because of the 'old person smell'. "The reason why we pay so much for insurance is because all the old retirees keep dying. Let's say, however, that when old people stop being productive members of society… we give them a permanent retirement before they start needing insurance payouts. You'll save the insurance industry and as a side bonus, you'll be able to save a few @@currencyplural@@ in welfare payments."

I am not sure I understand the logic of this option.

I assume by this is that they will euthanise people above retirement age. As the elderly commonly require more health care, removing them from the equation will lower costs to the health insurance companies. This option presumes that these savings will at least in part be passed on to the consumer, making it more worthwhile for healthy people to pay into these health insurance schemes and ending the "death spiral" as risks for the companies are lowered and the consumer base comes back in to prop them up.

I may be misunderstanding this, though. Do correct me if I am wrong.

[Frieden-und Freudenland]

I am not sure I understand the logic of this option.

I assume by this is that they will euthanise people above retirement age. As the elderly commonly require more health care, removing them from the equation will lower costs to the health insurance companies. This option presumes that these savings will at least in part be passed on to the consumer, making it more worthwhile for healthy people to pay into these health insurance schemes and ending the "death spiral" as risks for the companies are lowered and the consumer base comes back in to prop them up.

I may be misunderstanding this, though. Do correct me if I am wrong.

Ah, right. I think you are right. I just didn't realize 'permanent retirement' was an underhanded reference to euthanizing them. Aren't all retirements technically permanent, until the retiree dies? Maybe it should be called 'retirement from this world' or something like that? 'We need to let them retire from the troubles of this worldly life' might even sound more compassionate (!) and hypocritical. You don't want confused players complaining about accidentally installing a geronticide policy.

[Auphelia]

Ah, right. I think you are right. I just didn't realize 'permanent retirement' was an underhanded reference to euthanizing them. Aren't all retirements technically permanent, until the retiree dies? Maybe it should be called 'retirement from this world' or something like that? 'We need to let them retire from the troubles of this worldly life' might even sound more compassionate (!) and hypocritical. You don't want confused players complaining about accidentally installing a geronticide policy.

I would argue accidental gerontocide is the best kind, or at least more so than the intentional variety.

[Fauxia]

[option]"It is mostly the very sick that are signing up for health insurance these days," explains actuary @@randomname@@, as @@he@@ calculates your life expectancy based on your weight and smoking status. "Without healthy people contributing, the health insurance industry is going to be bankrupt. Allow us to charge different prices to people based on a genetic sample and their responses to our extensive questionnaire. That way, we can work out who is healthy and give them discounts to continue paying insurance."
[effect]the first question asked in insurance questionnaires is 'ASL?'

Wouldn't the assumption be that this is legal?

Also, given that it was the most famous piece of legislation in the USA of the last decade, I feel like someone ought to propose an individual mandate. That's up to you, of course. But I can't help feeling a center-right person may feel like the options are either ridiculous or communist. Not that issues are supposed to be easy.

Up to you in the end.

[Baggieland]

based on your weight and smoking status.

This would require the smoking policy whether or not LEADER smokes, as the option to smoke is clearly there.

[Electrum]

A
[effect]the first question asked in insurance questionnaires is 'ASL?'

You mean ALS? ASL is American Sign Language AFAIK.

ASL is old chat slang for age/sex/location. Makes sense for it to be a first question on an insurance questionnaire.

I assume by this is that they will euthanise people above retirement age. As the elderly commonly require more health care, removing them from the equation will lower costs to the health insurance companies. This option presumes that these savings will at least in part be passed on to the consumer, making it more worthwhile for healthy people to pay into these health insurance schemes and ending the "death spiral" as risks for the companies are lowered and the consumer base comes back in to prop them up.

I may be misunderstanding this, though. Do correct me if I am wrong.

Spot on.

re: comments on "permanent retirement" --- I really like the ambiguity of it but at the same time I love FuF's phrasing of "retire from the troubles of this worldly life" even more, so I'll go with that. Thanks.

[option]"It is mostly the very sick that are signing up for health insurance these days," explains actuary @@randomname@@, as @@he@@ calculates your life expectancy based on your weight and smoking status. "Without healthy people contributing, the health insurance industry is going to be bankrupt. Allow us to charge different prices to people based on a genetic sample and their responses to our extensive questionnaire. That way, we can work out who is healthy and give them discounts to continue paying insurance."
[effect]the first question asked in insurance questionnaires is 'ASL?'

Wouldn't the assumption be that this is legal?

It's not where I'm from, but I see your point. I'll just make it compulsory for people to give up genetic samples while testing.

Also, given that it was the most famous piece of legislation in the USA of the last decade, I feel like someone ought to propose an individual mandate. That's up to you, of course. But I can't help feeling a center-right person may feel like the options are either ridiculous or communist. Not that issues are supposed to be easy.

Up to you in the end.

Good idea, the idea didn't come to me, seeing as I live in a country with national health cover.

based on your weight and smoking status.

This would require the smoking policy whether or not LEADER smokes, as the option to smoke is clearly there.

Yup. Will change it to something more humorous.

[Australian rePublic]

I feel that this could also apply to countries with an NHS, such as Australia. In fact, this would be more likely to happen in a country with a NHS because the uninsured have a safety net. Australia is a good example of this, fewer people are getting private health insurance because Medicare exists and private health care exists, however, the reliance on Medicare is placing too much stress on Medicare

[Candlewhisper Archive]

[desc] Healthy @@demonymplural@@ have dropped their health insurance in droves because of their low risk and years of increasing health insurance premiums. Without further action, experts say that the insurance industry will collapse in what has been dubbed the "death spiral".
[validity] no national health cover, low levels of insurance, old people

The second sentence doesn't seem feasible to me. To me, it seems more likely that experts would predict growing health inequalities, rather than industry collapse.

Private health insurance is a capitalist system, and without external intervention its going to generally have an outcome of reaching the price point that maximises profit. If health insurance costs are rising then thats because thats what the market will bear. If people start dropping health insurance in sufficient numbers, they'll simply lower the price till they pick up customers again. The flaw of that isn't that the insurance industries won't thrive, but rather that the poorest can't afford it, and because the hospitals also operate on a free market model they raise the price of medical treatment to the point that the insurance companies will bear, which in turn makes it impossible to self fund treatment WITHOUT insurance.

Net result, of course, is that private healthcare is efficient at making profit, but inefficient at delivering healthcare at an affordable price.

To be clear, its not that i don't think health insurance death spirals don't exist, but i do think the market self-corrects, and the industry comes to no harm. The damage comes along the way when people find themselves without healthcare.

[option]"It is mostly the very sick that are signing up for health insurance these days," explains actuary @@randomname@@, as @@he@@ calculates your life expectancy based on your weight and smoking status. "Without healthy people contributing, the health insurance industry is going to be bankrupt. Allow us to charge different prices to people based on a genetic sample and their responses to our extensive questionnaire. That way, we can work out who is healthy and give them discounts to continue paying insurance."
[effect]the first question asked in insurance questionnaires is 'ASL?'

Eh, insurance companies don't need permission to do this generally. The default is that they can use any data that the applicant allows them access to.

[option]"Thou must smite the insurance industry completely!" beseeches @@randomname@@, as @@he@@ waggles his finger at you, while slowly shuffling into the room on @@his@@ walking frame. "Ahem. Sorry, that was a bit dramatic. All these companies want to do is line their pockets with our money, even though we have paid insurance our entire lives! Send these rascals a message by creating a taxpayer-funded national health service instead. No need for us to deal with a profiteering middleman, and you will get that warm fuzzy feeling of helping us people of age."
[effect]health insurers have become bankrupt because they didn't take government intervention insurance

NHS is a fix, but I think the angle of approach here is odd.

[option]"Can't you see it's these doddering old fools that are the problem?" asks your brother, as his nose is upturned because of the 'old person smell'. "The reason why we pay so much for insurance is because all the old retirees keep dying. Let's say, however, that when old people stop being productive members of society… we give them a permanent retirement before they start needing insurance payouts. You'll save the insurance industry and as a side bonus, you'll be able to save a few @@currencyplural@@ in welfare payments."
[effect]odour-eliminating soaps are suddenly popular amongst the elderly[/box]

I think if you consider setting up an NHS to be a drastic option, then that makes this issue have two drastic options to one mild one.

I'd suggest instead focusing on how rising insurance costs are making healthcare inaccessible to the poorest in society, and then go with something like:

1) premiums are high because of hospitals ramping up costs of medical treatment. set a national tariff that determines what price hospitals can charge, and this will lower cost of healthcare for insurance companies, and for self-funding patients.
2) or, just subsidise health insurance for the poorest in society. call it @@LEADER@@care.
3) the market will self-correct, and high costs incentivise the poor to work harder and do better. instead withdraw any government funded healthcare that still exists and let the invisible hand balance the scales.
4) or, get an NHS, you madmen!

I know thats drastically different, but that's how I'd personally approach it.

Now if you wanted to keep it specific to insurance death spirals, I guess that could work too, but you'd need more spiral-specific solutions and a better explanation of the underlying dynamic.

For example:

1) make health insurance mandatory
2) require insurance companies to accept applicants, and have external board making assessments of reasonable premium increase
3) require insurance companies to accept applicants, and make it a level premium regardless of risk factors, and this spread the cost burden evenly across all applicants.
4) provide state healthcare to anyone who can prove that they can't afford suggested premiums from multiple providers.

Dull, I know!

[Auphelia]

If it's so expensive, why not just make it illegal to provide healthcare at all?

If there's no healthcare, there's no health insurance industry to go into a death spiral or ruin people's lives.

Problem solved.

[Electrum]

The second sentence doesn't seem feasible to me. To me, it seems more likely that experts would predict growing health inequalities, rather than industry collapse.

Private health insurance is a capitalist system, and without external intervention its going to generally have an outcome of reaching the price point that maximises profit. If health insurance costs are rising then thats because thats what the market will bear. If people start dropping health insurance in sufficient numbers, they'll simply lower the price till they pick up customers again. The flaw of that isn't that the insurance industries won't thrive, but rather that the poorest can't afford it, and because the hospitals also operate on a free market model they raise the price of medical treatment to the point that the insurance companies will bear, which in turn makes it impossible to self fund treatment WITHOUT insurance.

Net result, of course, is that private healthcare is efficient at making profit, but inefficient at delivering healthcare at an affordable price.

To be clear, its not that i don't think health insurance death spirals don't exist, but i do think the market self-corrects, and the industry comes to no harm. The damage comes along the way when people find themselves without healthcare.

So the main reason why health insurance premiums are increasing (at least, in this issue) is due to the fact that the population with insurance is growing older. Insurers costs grow because older people are more likely to require services. Of course, they can reduce their profits by absorbing the hit, but at some point, prices will have to increase to reflect their growing costs. This induces more young people to leave, making the covered population, on average, even older. The cycle continues.

This issue has been brought up in America (in the context of Obamacare and people with pre-existing conditions instead of an ageing population) and Australia (where its ageing population has caused young people to drop health insurance in droves, even though the industry as a whole is seeing record-low profits).

Bear with me on this one, however, as I will retool the issue. I'm going to get rid of the NHS angle altogether and incorporate some of your suggestions that you wrote at the end of your post.