A reader in the risk business sends an interesting take on the Cohen piece:

Hi Jonah,
Thanks, we are all now dumber for having read that Cohen article. But it has one particular feature that you see all over and that drives me nuts (I am a Risk Professional).
“Pooling the risk among everybody is the most efficient way to forge a healthier society. That’s what other developed societies do. And they don’t have 30 million plus uninsured.”
This line makes no sense. A risk pool that contains everyone for Comprehensive Health Care risk is not a risk pool. It’s a payment plan. Risk Pools work for uneven, tail event risk. (The Catastrophic part of Health Insurance might qualify if stand alone, but that’s not what Roger or the D’s mean). In a functioning risk pool we all pay a little to protect from the ruinous effects of being in the unlucky ‘tail’ of the event distribution.
Comprehensive Health Care risk cannot be pooled! A moment’s thought shows why. Risk of me, you and everyone else getting old, sick, or old and sick? Near 100%. So there is no appreciable ‘lucky’ cohort to contribute some dough and not need benefits from the plan. Everyone will, just at different times and for different things. That’s not insurance, that’s a cash flow management tool.
Of course, if he wants to pool us all up so he can take some extra dough from some folks and pay for others who don’t have any money, well, that’s not insurance either. But you wrote the book on that one, so you don’t need me. J
Love your stuff. Rant complete now.

Update: From another risky business guy:

Dear Jonah,
A good note from your Risk Professional friend. I, too, do that sort of think in the energy field. The pre-existing condition story is the purest example of how that is a payment plan, not a pooling of risk. If you have a pre-existing condition then definitionally you need treatment of some sort. The only issues are (i) how to treat it; (ii) who pays for the treatment; and (iii) are there cost savings to be gained by chronic rather than acute care.
On the reportorial side of things I would like to see a good look at state regulation of insurance. This has always seemed to me to be a perfect candidate for regulatory capture, and it is not clear, in the case of a number of states, that the pools are large enough to actually spread risk. States may be perfectly good at ensuring financial adequacy for licensed insurers, but this is not the same thing as robust competition. In addition, if you go to opm.gov (Office of Personnel Management) and look up the health plans available to federal employees you will find that there is a full spectrum of options all over the country, even in the states (AL, ND) that are held up as prime examples of monopoly in health insurance markets. AL has 19 plans for the feds, DC has 27, I recall. There are multiple plans for each market niche – HMOs, PPOs, Major Medical, etc. – offering a wide variety of coverage options and network exclusivity. Definitionally, the feds have busted the state borders on this issue for their own employees. The states can still fulfill their fiduciary roles even if companies sell in more than one state.
Yet another case of quod licet jovi non licet bovi?

Update II: From a reader with a different gripe:

The part that amazes me even more was:
“Government, through Medicare and Medicaid, is already administering almost half of American health care and doing so with less waste than the private sector. Per capita Medicare costs for common benefits grew 4.9 percent between 1998 and 2008, against 7.1 percent for private insurers.”
Help me out here. I thought part of the reason HCR was going to be cost-free and provide insurance to millions of people was because it was going to cut a couple hundred billion dollars in excess Medicare spending (with no reduction in services- of course). That’s what this morning’s Washington Post says. How do you argue that a program is both wonderfully run and cheap, but also riddled with hundreds of billions in unnecessary costs? Both simply can’t be true unless you’re talking about service reductions. So, maybe “linking arms across America” is Cohen’s vision of how we help people with leg disorders to stand erect under HCR.