Insurance 101 For Paul Ryan: The Healthy Are Supposed To Help Pay For The Sick

Obamacare is in a "death spiral" because the insured are sharing the risk, explains congressman.

Paul Ryan is aghast that healthy individuals are paying into an insurance pot that’s used when people are sick. But ... that’s exactly the way insurance works.

Twitter positively erupted Thursday to school Mr. Health Insurance on the concept.

Everyone pays into the pot and draws on it when they’re sick. Younger people, who tend to be healthier than older people, pay for health insurance like everyone else. They’ll rely on it when when they need it, probably more when they’re older and there are younger, healthier people filing in behind them. It’s the same with car insurance. Some people pay for decades and never get into an accident and never collect on their coverage (though the likelihood of anyone never using health insurance is unlikely).

That’s what actuarial figures are all about, so an insurance system can assess the risks of segments of customers to determine what everyone needs to put into the pot so there’s enough to pay out when someone needs the money.

Ryan has perhaps been on taxpayer-paid health insurance for so long that he has forgotten how the concept works. He believes that’s only the way it works for Obamacare. “The conceit of Obamacare,” he said at his press conference on Trumpcare, is that “young and healthy people are going to go into the market and pay for the older, sicker people.” That’s why Obamacare is in a “death spiral,” he noted.

Twitter had a pretty predictable response to Ryan’s summary of health insurance: Duh.

The Huffington Post’s Washington bureau chief, Ryan Grim, asked Brendan Buck, Paul Ryan’s spokesman, what the alternative is to an insurance system that typically includes both the healthy and the sick. An annoyed Buck responded: “He was only saying the healthy/sick composition of the ACA pool is trending wrong and not sustainable.”

The pie chart Ryan used showed a small sliver of people with “pre-existing conditions,” such as a “woman in her 40s with breast cancer,” he happened to note in particular, and the vast rest of the pie, perhaps 85 percent, were healthy people, so it was difficult to know what “trend” Buck was referring to. The chart showed no number or percentages or costs of the segments.

Buck also said that Ryan “thinks” there aren’t currently enough healthy individuals buying insurance to make ACA work, though no figures on that were provided — or evidence that the Affordable Care Act isn’t working. Also, the Republicans’ bill would not make insurance mandatory, which would likely decrease the numbers of healthy people paying into the system, which would almost certainly drive up premiums.

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