The idea of groups barganing for coverage is a good one. Rather than buying an individual policy if the NRA or Bass Masters would bargain for group health like AARP does we might get a break.

The one aspect of health care reform that concerns me is the provision to not exclude perexisting conditions. Although this will not go into affect for some time it probably needs to be changed before it does.

A person goes without health insurance for decades because he would rather spend his money on other things. He has not paid anything into the pool, then he gets sick. Is it fair that he then buys health insurance, pays a one month premium of $600.00 and has $250,000.00 of medical bills paid?

I think there will have to be a buffer of a waiting period before preexisting conditions are covered, say at least one year. This would stop people from only buying insurance after they get seriously ill.

I sound tough on the insurance industry, but I also realize they have their bottom line as well. Typically an insurance company will consider a loss ratio of $0.95 good. What that means is that for every dollar paid in premiums they pay $0.95 out in claims. That leaves $0.05 for administrative costs, reserves, and dividends.

When you think about if 200 people insure houses worth $100,000.00 each. They pay $525.00 a year for insurance. One of those houses burns down. They pay $100,000.00 loss on the house and they have $5000.00 for cost, reserves etc. If two of those houses burn down they have a loss ratio of $1.90 (paying out $1.90 for every $1.00 taken in). They have to draw on reserves to pay the claims. Usually you do not see one in every 200 houses destroyed each year, but they also cover partial loss like roofs, wind damage etc.

So I still think we need more people in the risk pool to spread the costs and if these people are going to use the health care system they need to pay into the risk pool. Eventually most everyone will use the heath care system, so they need to pay into the pool.