The struggle for the soul of health insurance.

Abstract

The politics of American health insurance is a struggle over which vision of distributive justice should govern: the solidarity principle or the logic of actuarial fairness. Actuarial fairness is central to American private health insurance. It is both an antiredistributive ideology and a method of organizing mutual aid by fragmenting communities into ever-smaller, more homogeneous groups, leading ultimately to the destruction of mutual aid. This fragmentation is accomplished by fostering in people a sense of their differences and their responsibility for themselves, rather than their commonalities and interdependence. Actuarial fairness developed as a business strategy for gaining market share. Medical underwriting, which is far more extensive than commonly known, is the information technology used for implementing actuarial fairness. Despite significant changes in the political context of health insurance which are leading toward restraints on underwriting, the logic of actuarial fairness is so deeply embedded in the structure of competitive markets in insurance and so deeply consonant with social divisions in American society that eradicating it will take more than any current reform proposals contemplate.