Choice, Equality and Cost
Chapter 9: Insurance: private and public
Insurance can take a variety of forms. It can be provided by a variety of agencies. Section 9.1 on ‘Private health insurance’ and section 9.2 on ‘National health insurance’ discuss prepayment options in the two sectors. Section 9.3, ‘The National Health Service: payment and provision’, examines the double-barrelled structure that marries up the two sides of the circular flow. Finally, section 9.4, ‘Payment beyond insurance’, is a reminder that the money can be found even if there is no third party to share the risk. Not all insuring agencies in the non-State sector are commercial and for-profit. Some are linked to private charities, professional associations, trade unions, consumer co-operatives and hospitals. Some large employers operate their own insurance funds. All are subject to financial regulation to ensure that their capital is sufficient and their investments sound. Often that is the sum total of the regulator’s involvement. Individuals apply for private cover either because they have no core protection or because they want incremental options. The fact that the individual applies does not, however, mean that the application will be accepted. Each one-off is a mystery. Adverse selection is always a threat. A person who has made a calculated choice to spend money in the hand on an unforeseeable outcome in the bush must always be regarded with suspicion. Individual plans are always higher-priced plans because of the chance that the applicant is secretly anticipating an above-average claim.
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