A business school professor I had used to marvel at the amount of opinions held with little or no analysis to back them up. Pretty rampant in the ongoing health care debate. Seems many “informed” citizens need a refresher in adverse selection. The term is insurance industry vernacular for a situation in which only those who will actually use a certain type of insurance are those most likely to buy. Obviously, insurance companies want adverse selection held to a minimum so the risk is more evenly spread. If those who buy insurance are only those who will use the insurance, obviously the business is unsustainable.
Enter the arguments over pre-existing conditions, and whether or not companies should be forced to cover them. According to the survey highlighted in today’s “Boomer Behavior,” 97 percent of boomer women agreed that coverage for pre-existing conditions should be guaranteed.