Actuarial Fairness versus Solidarity Principle – US Health care policy
The concepts of actuarial fairness and the solidarity principle have historically competed for dominance in American policy making. Which of these two concepts do you feel should dominate policy making in the USA and why? Please provide examples. Solution Preview
The concepts of actuarial fairness and the solidarity principle have historically competed for dominance in America policy making. Which of these two concepts do you feel should dominated policy making in the USA and why? Please provide examples.
There is a struggle in the American health insurance politics as to which vision should dominate: the solidarity principle, or the logic of actuarial fairness (Stone, 1993).
Actuarial fairness is central to American private health insurance. It is an anti redistributive ideology. It fosters differences among people rather than commonalities. It fragments communities into smaller homogenous groups. It is more a strategy for gaining market share by insurance companies. Actuarial fairness is implemented through medical underwriting. Actuarial fairness is deeply entrenched in insurance business and in tune with social divisions in the society. Eradicating actuarial fairness would not be feasible with current reforms.
Actuarial fairness presumes that people should pay premiums that reflect the levels of risk that they actually face. Underwriting is the process by which insurers determine the levels of risk of their applicant, so as to exclude those with high risk or to charge them higher rates of premium (Daniels, 1996).Actuarial fairness, considers that it is fair that each risk group pays for their own risks.
European countries believe in the solidarity principle, the idea that we all help each …
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