In response to a letter
from John Strauss on Aug. 2
To the editor:
It seems to me that there are not a lot of facts to support the statements made by Mr. [John] Strauss.
The role of the actuary goes beyond “producing mathematical projections; the results are used by insurance management to produce “Insurance Policy” (economic, statistical, mathematical – assessment of financial risks).
Note that the rates are established not only as a result of actuarial assessments, but are also based on specific risk factors and coverages. Therefore, we have something called “an underwriter.” All proposed rates and rate changes must be approved by the state insurance departments where the insurance company is admitted to do business. So, the idea that you can charge whatever you want is absurd.
The Affordable Care Act: The author has overlooked the fact that the act was passed by a Democratic House and a Democratic Senate. No Republicans there. The author has also overlooked the fact that no government can force or require anyone to purchase goods or services! That’s law! Therefore, the Supreme Court [Justice John Roberts] intervened and made or declared it a tax that was to be imposed on those individuals who did not want to purchase the health insurance coverage (essentially a financial penalty). So, when the author talks about the need for mandatory coverage, he should think it through and stop blaming the Republicans!
Auto insurance: Auto is mandatory; however, if you own the car and you do not have a car note, the only coverage mandatory is liability to a third party. If you are financing your car, the bank wants the actual car insured – makes sense. However, you don’t have to buy auto insurance. Just don’t drive!
Homeowners insurance: Only mandatory if the bank still owns the house and you pay mortgage. Again, the coverage protects a third party – the bank. Once you own your home, stop paying insurance, if you think it’s a good idea.
As one can conclude, it’s only mandatory to protect others (third parties)!
“Actuarial projections are also the reason for mandatory coverage.” False statement. One has absolutely nothing to do with the other.
“Without mandatory coverage, premium would be beyond reach for most.” Another false statement. See above. Insurance companies will not and cannot charge whatever they want! It is trashing an industry with made-up assumptions, false statements and general cluelessness.
Finally, the following statement, “It’s the legislatures who oppose mandatory coverage! Most are Republicans!” is not only false, it’s inflammatory. Before anyone writes this material he should do some research. To some of us, facts still matter.