Can a National Risk Pool Save Health Insurance?
President Obama, in a prime time address to Congress, pledged to reform health care in America. All types of insurance are supposed to let people pay premiums into a risk pool that generates a reserve fund to pay losses. Insurance companies employ mathematicians to analyze actuarial data on mortality — accidents, sickness, disability, retirement and other risks — to construct probability tables that will determine the premiums that will generate reserves to pay future losses. The risk pool has to be defined and probability tables calculated as random risk. Life insurance actuaries use data accumulated from many years to know the random risk that someone age 50 will die during their 51st year. They don’t know who will die, but they know the probability, which lets them determine the premiums necessary to build an adequate reserve fund. Life insurance policies typically exclude death caused to soldiers in warfare because it is not random risk and prevents actuaries from building a reserv
