Understanding why anyone who punches a clock or is self employed would get turned down for health insurance, as a matter of ethics, can be a tough thing to get your head around. Thankfully, one way or another, from New York to San Francisco, human beings, from health care professionals to social workers look out for those who fall through the cracks.
From a health insurance industry standpoint, their actuarys [an actuary is an advanced mathematician, practically a magician, who can crunch numbers that will predict the future] must determine if certain conditions will cause the number of health care costs to exceed the premiums collected, thus causing the system to collapse.
Generally, the bigger the group is, the more accurately these numbers apply. An actuary can’t tell you that you are going to get diabetes at age forty two. They are not that good…Yet! But, they can come very close, within a fraction of a percent, when they say “of the 19,490,286 people living in the State of New York, 18, 215 forty two year olders are going to be diagnosed and treated for diabetes this year. Of course they also know how much that treatment will cost, and therefore how much in premiums they need to collect from the entire group in order to cover those costs, ahem, and make a profit.
The smaller the group becomes the more difficult it is to determine the potential payouts, and with it the amount of premiums to be collected. If the group includes all that work directly for New York City, police, fireman, government office workers, and so on, these actuaries can still do a pretty good job. There is a good cross section of people here. Fireman are healthy and fit, but more prone to an accident than a NYC office worker that maybe a bit overweight and stressed out from piloting a desk as they develop carpal tunnel syndrome from going clackity-clack at the computer all day.
It’s when health insurance companies must deal with the lone self employed individual that their job gets real tricky. They loose the group statistical advantage for accuracy. And it’s not just the actuaries in the employ of the health insurance companies that have an uphill battle to fight to get these people paying an appropriate premium to cover their potential health care costs. Those who negotiate a plan for the NYC fireman’s union for instance, has the advantage of doing all the leg work for an huge group. The work involved in setting up a deal for one self employed person at a time, as you can imagine, is daunting. It’s all about scale of economy. These might be the reasons that a self employed person could get refused for health care coverage.
