Monday, August 04, 2008

another reason for a national health insurance system

From today's Washington Post: Health and life insurance companies have access to a powerful new tool for evaluating whether to cover individual consumers: a health "credit report" drawn from databases containing prescription drug records on more than 200 million Americans.

In other words, if you have a history of taking medication commonly associated with high cholesterol you will have a hard time buying health insurance. If you have a history of taking medication commonly associated with depression, you will hae a hard time buying life insurance.

Compiling such "health reports" is economically rational from the perspective of insurance companies. Their goal is to ensure that payments for medical services are less than what they take in in the form of premiums.

But it is more and more apparent that this system is not rational from a national economic or health perspective. Overall, we as a nation (let alone as individuals) benefit from keeping somebody's cholesterol levels under control. Taking a step further, we benefit even MORE from keeping people from having high cholesterol levels in the first place, but the medical sector hasn't figured out a way to make a profit on prevention - but prevention is clearly the most economically beneficial outcome for the country as a whole, and for individuals.



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