Managing risk

Insurance companies make money by managing risk. If a guy with a DUI on his record comes to an insurance company, trying to buy automobile insurance, the insurance company will either decline to sell him a policy, or only offer him one with a very high premium, to offset the greater risk of insuring such a person.

The same holds true of health insurance companies when it comes to people with pre-existing conditions. If someone wants to buy health insurance, but he’s been a chronic smoker or had a liver transplant, the insurance company is either going to decline to sell him a policy, or only offer one with a huge premium, because such a person is a known risk.

Then we got Obysmalcare, which tries to use the private insurance companies, but removes the prime tool of insurance companies to make a profit, their ability to manage risk.

The result? Insurance companies are pulling out of the Obaminablecare markets, leaving many areas with only one ‘choice,’ and a few areas, around Knoxville, with ZERO choices, all because they kept losing money there.

So, when I hear the left complaining about the loss of pre-existing conditions protection in the AHCA, what I think about is all of those people who would otherwise have far less expensive insurance options, except for the fact that they have to pay much more to cover otherwise uninsurable people.