AIDS and the Limits of Insurability

Abstract

Insurance is a technique to redistribute the economic consequences of loss from victims to the entire group. AIDS appears to lack the essential market and actuarial criteria of an insurable risk, without compromise to civil liberties or fiscal viability. Issues surrounding identification and classification of persons at risk of contracting the disease are most contentious. Accommodation, especially for health insurance, may be possible through mandated pools and other public and legal actions.

The insurability of innovative pharmaceutical cancer technologies

“…The question of whether losses are insurable by the VHI offered by commercial companies is one that can be answered. Since the work of Berliner [17], this question is often part of the analysis of insurance markets [18][19][20][21]. The concepts of insurability are uniformly applicable to any line of insurance and to both group and individual underwriting.…”

“…He identified nine criteria, not all independent of one another, which define insurability. The criteria are categorized into three broad groups that classify risks in terms of actuarial, market, and societal conditions [17][18][19][20][21].…”

“…Insurability is becoming less feasible as the required premium increases. The market criteria require that the insurance premium be affordable to the target population, that it provide cost recovery and that the policy's cover limits be acceptable [18][19][20][21]. The pure premium is equal to the expected value of the annual loss and-as a buffer against insurer ruin-a contingency loading to provide for adverse fluctuation in claim results.…”

The economics of AIDS-related health insurance regulations: Interest group influence and ideology

“…Because the categorization process is imperfect, however, some individuals are assessed to represent a level of risk higher than their true risk, while others are assessed to have risk lower than their true risk. This problem is generally referred to as "categorical" or' 'statistical" discrimination (e.g., Hammond and Shapiro, 1986).…”

“…The actuarial basis for employing seropositivity in underwriting is as strong or stronger than many other generally used and accepted risk indicators, such as risk premiums for smokers versus non-smokers (Clifford and Iuculano, 1987). Prohibiting insurers from using seropositivity, when such information is available to the insured, is likely to exacerbate adverse selection problems (Hammond and Shapiro, 1986).…”