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Obamacare can't divorce insurance from risk [Letter]

Health Insurance

Columnist Susan Reimer sees no problem with some groups paying more for health care insurance than their actuarial risk while others pay less under Obamacare ("Splitting the health care tab with the guys," Nov. 11).

She says "isn't that what insurance is for, to spread the risk?"

However, spreading the risk is only one half the insurance equation. The other half is to provide each consumer with feedback on the amount of risk being transferred. That information is provided by linking the premium to behavior.

The link tells consumers what behavior will increase or decrease the premium. As individuals modify their behaviors in their own economic self-interest, less risk is absorbed by the system as a whole and everyone wins.

But if everyone paid the same premium, why would anyone modify their behavior? Certainly there are many illnesses that are unavoidable. However, health care costs related to smoking, drinking, obesity, inactivity, drug abuse and other behaviors cost the nation hundreds of billions of dollars every year.

What Ms. Reimer describes, when people pay premiums according to their income and not their actuarial risk, is a tax, not insurance. Hence, she makes the incorrect analogy that taxes are to public schools, highways and bridges what premiums are to insurance.

Steve Williams, Towson

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Copyright © 2014, The Baltimore Sun
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