re: #381 Obdicut

No, you’re ignoring what I said.

A for-profit insurance company has to extract profit. That is it’s goddamn raison d’etre. Money is paid into the system that gets taken out of it as profit.

A government program doesn’t have to make a profit. No money has to be taken out of the program. All the fees put into it can be applied to claims, and more put into the system if needed from outside funding.

For many things, insurance works well. The companies manage a reasonable amount of risk and charge for the service. With some things, like health insurance, flood insurance, earthquake insurance, the system is too unstable, extreme, or otherwise unfit for private profit motive to provide any benefit, and the private insurance is much less effective than the governmental one.

This has fuck-all to do with claim evaluation. The lack of profit motive doesn’t meant that the government lacks motive to distinguish between valid claims and invalid ones. It does mean the for-profit company has a motive to deny claims not based on real validity but for any reason that they can.

I think lawhawk has a point, though, Obdi. Government agencies are vulnerable to public pressure, so orders might come down to not screen claims too closely or to pay out claims of flood damage that were actually wind damage. Or you could just political pressure to pay out have the good old-fashioned fraudulent claims (New York is much cleaner than it once was, but any big city will have a few corrupt officials).