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What makes gambling wrong but insurance right? (2017)

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Re: What makes gambling wrong but insurance right? (2017)

#281

Post by dangus »

LorenPechtel wrote: post #278
mrazomor wrote: post #255

Earlier quoted context omitted.

> With this in mind insurance is a service worth paying for as long as the fee is lower than utility you gain from it. Why even consider the insurance as investment (money increasing tool)? A stock market would get you higher gains at more controlled risk. The 3rd best financial advice I got is about insurances: "Pay the insurance only if the negative outcome would cause you a significant financial loss" (and is of r…

Disagree on the probability bit. The important part is the severity of the negative outcome. And if you can't afford to lose the toy you couldn't afford to buy it in the first place. Thus toys should never be insured. (That is, of course, assuming they aren't mispricing it. I've seen a situation like that where I considered it: There are companies that offer small-appliance warranties at approximately an x% of price…

> And if you can't afford to lose the toy you couldn't afford to buy it in the first place. Thus toys should never be insured.

You’re getting this wrong.

Being unable to afford to lose a toy doesn’t mean you weren’t able to afford it, it means you weren’t able to afford buying it twice.

It works the same way with home insurance. I can afford the house. I can’t afford two houses if my current house burns down and I need to buy another one.

Re: What makes gambling wrong but insurance right? (2017)

#282

Post by scott_w »

mcculley wrote: post #276
scott_w wrote: post #275

Earlier quoted context omitted.

Except this simply DOESN’T HAPPEN in the most famous free healthcare system on Earth, so clearly it can’t be a moral hazard. I also know for a fact these people aren’t getting this for “free.” I just checked and copay is subject to the deductible. Also, I seriously doubt insurance companies aren’t ramping up premiums on these people once they get a chance. Are these people seriously going “well it’s only $26 a pop so…

I believe that you have strong opinions of the system with which I have too much experience. Many of these people are, in the case of pain clinics, getting their pills paid for by workers’ compensation carriers. That the UK has avoided some moral hazards does mean that they cannot exist elsewhere. Maybe the UK doesn’t incentivize doctors to hand out more pills.

No, I have a strong opinion that the moral hazard of affordable healthcare doesn’t exist based on the lack of evidence. Americans (and the hard right of British politics) are the only group that even consider such an argument.

If there were a moral hazard to affordable healthcare, I posit that you’d see lots of it in a system where healthcare is mostly free at the point of use (prescriptions aside). The fact that obesity and opioid addiction happen in the USA at far higher rates than in the UK points to a strong indicator that this moral hazard simply does not exist. The fact is that the only examples you can give point to issues unrelated to “moral hazard.”

You have failed to point to a systemic pattern of risk-taking behaviour that is higher in a system with socialised healthcare than in privatised systems to convince me otherwise. You cannot because it doesn’t happen. Human beings, on the whole, do not engage in obviously dangerous behaviour more if it’s free to get treatment because we’re simply not that stupid.

Re: What makes gambling wrong but insurance right? (2017)

#284

Post by mcculley »

scott_w wrote: post #282
mcculley wrote: post #276

Earlier quoted context omitted.

I believe that you have strong opinions of the system with which I have too much experience. Many of these people are, in the case of pain clinics, getting their pills paid for by workers’ compensation carriers. That the UK has avoided some moral hazards does mean that they cannot exist elsewhere. Maybe the UK doesn’t incentivize doctors to hand out more pills.

No, I have a strong opinion that the moral hazard of affordable healthcare doesn’t exist based on the lack of evidence. Americans (and the hard right of British politics) are the only group that even consider such an argument. If there were a moral hazard to affordable healthcare, I posit that you’d see lots of it in a system where healthcare is mostly free at the point of use (prescriptions aside). The fact that obe…

I would very much like to move to live amongst the people that are simply not that stupid.

Re: What makes gambling wrong but insurance right? (2017)

#286

Post by AbstractH24 »

leashless wrote: post #38

In insurance you expect to come out ahead in the average case. In gambling you expect to come out behind in the average case. Therefore insurance is rational and gambling is irrational.

Is gambling irrational if you are the house or bookmaker's side of the transaction?

Re: What makes gambling wrong but insurance right? (2017)

#287

Post by kgwgk »

AbstractH24 wrote: post #283

There's nothing wrong with gambling as long as you are aware of the odds and make intelligent decisions based on them. Same with insurance. Where both insurance and gambling go wrong is when people try to appeal to your emotions rather than logic.

> There's nothing wrong with gambling as long as you are aware of the odds and make intelligent decisions based on them.

Essentially if you’re aware of the odds and make intelligent decisions based on them there is no_____ _____ ____ gambling.

Re: What makes gambling wrong but insurance right? (2017)

#288

Post by kgwgk »

LorenPechtel wrote: post #280

There's another factor that sometimes is in play here: tax treatment. I used to take my employer's dental coverage. I considered the expected value to be "negative" and could easily self-insure. Yet it was a good deal anyway: I could pay the insurance cost with pre-tax dollars, but if I paid out of pocket it was with after-tax dollars. This is also why you periodically see news things about *big* employers taking out…

> There's another factor that sometimes is in play here: tax treatment.

Indeed. I wish I could "insure" my car's maintenance using pre-tax money.

Re: What makes gambling wrong but insurance right? (2017)

#289

Post by scott_w »

mcculley wrote: post #284
scott_w wrote: post #282

Earlier quoted context omitted.

No, I have a strong opinion that the moral hazard of affordable healthcare doesn’t exist based on the lack of evidence. Americans (and the hard right of British politics) are the only group that even consider such an argument. If there were a moral hazard to affordable healthcare, I posit that you’d see lots of it in a system where healthcare is mostly free at the point of use (prescriptions aside). The fact that obe…

I would very much like to move to live amongst the people that are simply not that stupid.

Now I don’t know if you’re just deliberately misreading my comments. At no point do I say “people don’t engage in dangerous behaviour,” I merely point out such behaviour is UNRELATED to the cost of healthcare. You’ve yet to show me any data that shows a link between affordable healthcare and moral hazard.

On the contrary, your only examples come from within a system famed for being the opposite.

Re: What makes gambling wrong but insurance right? (2017)

#290

Post by foogazi »

Lazare wrote: post #204

Fundamentally both "gambling" and "insurance" are about trading a stream of small guaranteed payments for a chance at receiving a large payment. More generally, it's about trading risk. In insurance the risk is transferred to the insurance company; in gambling the risk is trasnferred to the gambler. They're precisely the same transaction, just packaged in different ways, and with tons of overlap. What differs is the…

With life, home, auto insurance you already bought in on one side of the outcome (life, property value) - you are trying to minimize your loss.

With a football match you are not staked to either side - gambling event happen everyday around you and have no effect on you.

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