From Karl Denninger:
Oh look what the cat dragged in….
“This population doesn’t understand why insurance is necessary,” Cheryl Smith, a health-exchange specialist at Deloitte Consulting LLP in New York, said in an interview. “It really is to protect your assets. When you’re young, you don’t have assets. You don’t worry about it.”
When you’re young and don’t have assets you don’t need much if any insurance. If something really awful happens you file bankruptcy instead, as you have nothing to lose.
This is why you carry minimum liability coverage on your car, and nothing else. You have nothing to lose. In a serious accident where you get tagged for $1m you file bankruptcy. It makes much more sense to cover only routine things (which you can afford) instead of the six sigma events that are extremely unlikely.
The latter, if it happens, has an “out” — you have no assets, so you head to the courthouse and file bankruptcy. This is not not only legal it’s entirely logical.
Note that if you’re a bit older and also have no assets the same calculation attaches. You have nothing, therefore you need little protection of assets because you don’t have any.
There is this insane proposition among those in Washington that is the same as the insane proposition among so-called “investment professionals” that I see on display all the time. I witnessed some of it recently among a group that were nearly-all in the “1%” (if not all) when one of the presenters asked “who in the room hasn’t refinanced their house twice during the interest rate drop.”
One hand went up.
Because most of the rest of us either had no mortgage at all or a very small one compared to equity and the cost of refinancing would not be recovered by the lower payments. In other words we didn’t turn the crank in that fashion because it made no economic sense.
The problem of course is that for the common man — the “99%” — the premise that the “health insurers” are trying to sell the population on is false.
As insurance costs rise the six-sigma event that puts you in the poor house becomes less economically interesting in insuring against.
At its core the “health insurance” mess is function of market manipulation through price-fixing and other forms of cartel behavior that are supposed to be illegal in the United States. But neither the left or right will take this on and the American Sheeple have been cowed into the corner and are unwilling to force a resolution through the political process.
The truth of the matter is that the entire medical establishment has become a cancer on the American economy and is consuming its host, resulting in an economic wasting disease that is emaciating everyone — and everything — in the American economy.
This cancer must be excised and destroyed or our economy will die. Attempting to find ways to build more arteries to carry yet more blood and nourishment to it is an idiotic response to discovering cancer. You don’t encourage the body to build circulatory resources to feed a cancer, you kill it, either by cutting it out and tossing it in the trash or bombarding it with high levels of energy and various poisons (e.g. radiation and chemo.)
That is the choice that was facing our nation two decades ago, a decade ago, in 2009 and now. But as with cancer there is a window during which you can excise that growth or it’s too late and you die.
We are rapidly reaching that economic point.