Last edited Mon Feb 20, 2012, 09:15 PM - Edit history (1)
the multiple variables of health care coverage in the USA, and not well-informed about probability or statistics.
So the 100+ million UK folks over there have better coverage, more preventive care, all sorts of other variables than those of us in the USA. Most of the USA, probably 89-90% NOW covered, not close to 100% but better than before Obama.
Sorry, too many variables, and too many differences for us to look at populations with which we are familiar. Let's just say, "vive la difference"
Now, on to my theory: that your "birthday paradox" graph looks a lot like an inverse of that graph. The inverse sA hows us more people dying early, a steady number until few die, (because only a a few are left) at the end of the graph. The important part is when the graph looks pretty steady, where about each and every year adds an equal amount of people to the likelihood of death. There's where the premiums must be highest, and the payouts lowest.
To be sure, some idle banker in the 18th century came up with this as he sat with his basic knowledge of probability and statistics, and had nothing else to do but bet which old person walking into the bank would be alive the next year. A thousand re-alignments of that graph later, insurance companies know when to sell policies to 55 year olds, when to stop selling or renewing them to 85 year olds....
This is how modern insurance industries are structured.
You sell 10,000 policies to 10,000 55 year old's, promising 1,000 to every policy holder per premium of $20. that's $2,000,000. You know that, out of an average of 10,000 55-year olds, only 40 people will die, and collect their $1000 in benefits. That's 2
00,000...............profit: 90% of premiums plus premiums, about 8% of premiums, or 2% of premiums collected actually paid out. 98% reciepts over payouts, better than any other merchandising where you have to buy (pay), on average, 50% of what you collect in sales.
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