PrintMarch 28, 2007
Why No One Wants to Crack the Health Care Walnut
A few days ago I had dinner with friends from a boutique actuarial services firm. After some chit chat, we soon turned to health care costs, health insurance and, as one would expect in the small talk lexicon of actuaries, mortality tables.Soon enough we all agreed that the notion of health care insurance these days is both misleading and a misnomer. Because life expectancies are now in the 80s-in fact someone with average health at age 65 can expect to live until age 90-the probability that any one of us will die without having at least one prolonged expensive disease-cancer, heart disease, diabetes, arthritis-is virtually zero.We are all familiar with the usual insurance underwriting risks-a boiler explosion, a house fire, car accident, crop failure. Insurance underwriters routinely calculate the probability of an infrequent but potentially catastrophic event to price the reimbursement for the accompanying unwelcome financial loss. They will even price...(Read Full Article)
