Ordinary Banana

sacredness of life seems pretty universal not just US - but there’s something there shielding medicine from being a true market

why allude to a mysterious "something"? we know with absolute certainty what the thing is: the insurer payment model.

me, an idiot: "I bet I get sick" insurer, a genius: "I bet you don't, pay me $7000/year for counterparty risk premium"

does it also apply to other insured things? the level of fucked upness seems peculiar to medicine

I think that's a yes. Credit default swaps, for example, are a type of insurance that nuked international credit markets into smithereens in 2008. Different particular pathology, same general cause: insurance is an inappropriate finance model for very many things.

in the case of CDS the market that was distorted was home mortgages. other forms of insurance have to be very particularly regulated to avoid some of the obvious insanely perverse incentives (life insurance is the canonical example).

in case it's not clear, insurance has a tendency to transfer risk in perverse ways. it's designed to be a risk transfer mechanism so it's not that surprising. it's possible to transfer risk to the wrong place, and the most wrong place of all is **everyone else**

ok problem is not just insurance here but lumping stuff that shouldn’t be under the insurance model at all in that