Friday, January 6, 2012

Interpreting the News

Hey, boys and girls, can you spot the logic in the following headline? 

"Report: Health Insurance Profits Rise Despite Health Care Reform"
--headline,, Jan. 5

Yes, that's right, sports fans.  Since the point of Health Care Reform™ is to require everyone to by health insurance, insurance companies will then be selling more policies, more cash will flow in, and their profits will rise.  Not "despite," but "because."

Note that another purpose was to require policy coverage be given to people with pre-existing conditions.  This vastly changes the actuarial risk to the insurance pool and in fact changes it from insurance to entitlement.  A greater actuarial risk means a higher premium to cover it, and this too means a rise in profits. 
+ + +

Gandersauce Alert

  • "It is disturbing that President Bush has exhibited a grandiose vision of executive power that leaves little room for public debate, the concerns of the minority party or the supervisory powers of the courts. But it is just plain baffling to watch him take the same regal attitude toward a Congress in which his party holds solid majorities in both houses. Seizing the opportunity presented by the Congressional holiday break, Mr. Bush announced 17 recess appointments--a constitutional gimmick. . . . Presidents Ronald Reagan and Bill Clinton made scores of recess appointments. But both of them faced a Congress controlled by the opposition party, while the Senate has been under Republican control for Mr. Bush's entire five years in office."--editorial, New York Times, Jan. 9, 2006
  • "Nearly six months after it opened its doors, the Consumer Financial Protection Bureau finally has a director, after President Obama's recess appointment of Richard Cordray. . . . Mr. Obama also appointed three new and qualified members to the National Labor Relations Board. . . . Announcing the appointments, Mr. Obama also asserted a welcome new credo: 'When Congress refuses to act, and as a result, hurts our economy and puts our people at risk, then I have an obligation as president to do what I can without them.' Hear. Hear."--editorial, New York Times, Jan. 5, 2012
And this is just plain funny, from the WSJ Best of the Web
"A poorly chosen baby name can lead to a lifetime of neglect, reduced relationship opportunities, lower self-esteem, a higher likelihood of smoking and diminished education prospects, according to a new study of nearly 12,000 people," Canada's National Post reports:
The research, which appears in the journal Social Psychological and Personality Science [sic], is thought to offer the firmest conclusions to date that "unfortunate" first names evoke negative reactions from strangers, which in turn influence life outcomes for the worse.
The story's headline adds even more ill effects: "Bad Baby Name Could Leave Your Child Sadder, Dumber: Study."

Hmm. We have a president named Barack Hussein, and as of a month ago the two leading contenders to challenge him were Willard Mitt and Newton Leroy. That ought to clear things up for anyone having difficulty fathoming the rise of Richard John Santorum.

Global Warming
is there anything it can't explain?


  1. The hybrid shark story *jumps*.

    "They may not look very different, but a group of sharks discovered off the coast of eastern Australia are unlike any other in existence."


    "The sharks, which are a cross between the closely related common blacktip shark and the Australian blacktip shark..."

    So they're unlike either related blacktip shark species?

    Oh, wait! They're first hybrids discovered!

    No? Oh, the first hybrid sharks discovered! With DNA. That is with advanced DNA speciation detection technology. Which has been around and applied to sharks for -- man! -- must be months now.

    How could we humans have possibly missed these hybrid sharks for the thousands of years of human history? It's uncanny!

    But wait! Order now and we'll add FREE the fact that because of global warming of the oceans this hybrid species is better adapted to **cooler** waters.

    As Noah said to God [in the voice of Bill Cosby], "RIIIIIGHTTTT!!!"


  2. It's amazing, isn't it, how easily, and how regularly, "liberals" are caught off-gard by the post mundane and predictable things -- including things we conservatives have predicted?

  3. A greater actuarial risk requires a higher premium to cover it. Whether that leads to increased, decreased, or unchanged profits depends on whether the premium increase more than covers, less than covers, or exactly covers it.

    Since the determiner of the increase is the insurance company, I know what I'd bet they choose. In theory, higher costs could mean lower profits (when the state insurance commission refuses to let companies recover the full increased cost, typically leading to the insurance companies ceasing to do business in that state).

  4. @Seth: You are right. I neglected the governmental elephant in the room. Something similar happened in auto insurance years ago when the government declared that statistics was bad and that young boy and young girl drivers should pay the same premium because... well, because. As a result, young girl drivers wound up paying higher premiums, in effect subsidizing the bad driving of their brothers.

  5. Can't happen here in Michigan!

    Oh... wait a minute ...

  6. Actually, though, you totally missed the logic of the headline. Clearly, one of the goals of national health insurance is to rein in the obscene profits of those dastardly insurance companies.

  7. Another reason that insurance profits went up: my two-year-old has pregnancy coverage. -.-

  8. It's amusing (in the "I'd rather laugh than cry" sense) to see what sorts of discrimination the government allows. For instance, it's legal to charge women less than men for life insurance, because women tend to live longer. It isn't legal to charge women more than men for life annuities, even though women tend to live longer. (There ought to be an arbitrage possibility there, but the bid/ask spread is too high.)



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