It's time to bring Obamacare to life insurance
I'll be the first to admit that I believe the Affordable Care Act (aka Obamacare) was done completely wrong and should have moved to a single-payer system. That being said, I'm still glad it passed, only because when I tried to place a health insurance policy through for a very healthy, 36-year-old woman, the health insurance company turned her down after ordering medical records from her doctor and discovering that when she was in her 20s, she had two abortions. They turned her down flat for insurance, even though more than a decade had gone by.
Why did they deny her coverage? (I don't want to discuss the abortion issue here, especially since it was announced in the news recently that abortion rates are at the lowest since the 1970s.) Was the underwriter pro-life and personally committed to keeping this woman from receiving coverage? Did the underwriter think that the company might have to pay for some related health issue in the future? Either way, it is almost like a form of elitism. The woman was in great health at the time of her application, yet an underwriter just said, "No insurance for you!" Almost like the "Soup Nazi" from the popular Seinfeld episode — only Seinfeld is a comedy, and this was real life.
After the past few months of experiencing elitist behavior from underwriters in the life insurance industry, I am ready to see a change. Let's get real. An underwriter can't tell worth a damn when someone's gonna die any more than you or I can. Do you thing the underwriters or actuaries got it right on Patrick Swayze, Steve Jobs or Dennis Hopper, who all met with untimely deaths? How about all the people who get killed by drunk or distracted drivers every year, which is estimated to be about 41,000 deaths annually? Do you think the underwriters got any of those right? How about the over 45,000 women a year who contract HIV from cheating husbands? Do you think the underwriters guessed any of those might happen?
If we want to be realistic, underwriters are guessers at best, and the only thing they do is exercise elitism. They put patients through unnecessary medical exams (I'll go with a simple urine and blood), but many times they ask for more and spend half their time being snoopers trying to dig up people's pasts.
I'm disturbed by all of it and mostly the fact that insurance companies often deny people life insurance or make the rates impossibly high for anyone with a health problem. For example, many leukemia patients in the U.S. are flat out denied. So, Patrick Swayze gets life insurance and dies quickly, but the leukemia patient the life underwriter turned down gets cured and lives to be 85.
The whole point of life insurance has been missed. It's supposed to be a pool — a fair pool, where everybody pays a similar amount and when one dies, their family gets a pot of money to replace the person's income. Whatever happened to this simple thinking? The difference in premium payment should only be determined by the amount of insurance. OK, I'll give you this: If they have HIV or leukemia, perhaps they should have to put in a little more, but hey, that's not the case. Those people go in the round file. Do we really have to have an Obama revolution in the life insurance industry to put a stop to underwriting elitism?
Really, I'm just tired of underwriting hassles. A simple urine and blood sample, then issue the damn policy already. If they're obese, up the cost of insurance a level, and then issue the damn policy. Quit trying to find out what happened at their last visit to the doctor 14 years ago.
The future of underwriting lies in predictive modeling
Will the government take over the life insurance industry?