Perhaps the most important lesson I learned when I was an insurance broker was the law of large numbers. Simply put, the law states that the more “risk units” you have in the pool you are underwriting, the more likely the losses will conform to what is predicted. Made sense then, still makes sense now.
If the goal of health care reform is to bend the cost curve, why not increase the number of “risk units” in the pool of insureds and thereby make the expense of losses closer to the predicted figure?
The Affordable Care Act’s requirement that eliminates the pre-existing conditions exclusion for people seeking insurance is intended to produce the largest possible pool of “risk units” so that the actual losses incurred are closest to the costs estimated.
A second lesson from my time in the insurance field is that insurance coverage should further equity or fairness. For too long, too many of those without insurance, whatever the reason for their lack, have accessed the health care system without paying for their care. The resulting cost-shifting has increased the cost of care and of insurance coverage for those who have bought health insurance—an inequitable arrangement.
The ACA with the changes it will implement by 2014 will reduce the number of uninsured. That in turn will make the expense of health care more predictable, possibly lower, and ultimately more equitable.