Is Actuarial Fairness a Valid Concept? Should Something Replace the Concept.

Actuarial fairness has an ironic name in the sense that a reasonable person could argue that the concept is not fair at all. Actuarial fairness is the guide that insurance companies use to “limit or deny coverage for vision care, hearing aids, mental health care, and even AIDS treatment based on actuarial justifications” (Hoffman). This enables insurancers to deny certain people coverage based on their health. For example, one might be less likely to receive coverage if you have poor health in family history, are overweight, or have a disease. My aunt actually had an issue with actuarial fairness in the past. She had a difficult time receiving coverage because she had skin cancer. At the end of the day, insurance companies are businesses. Businesses strive to make profits. Most reasonable people, and business people are risk averse. A sick, meaning “the real presence of a disease in a patient, or at least a lack of a particular good health trait”("Definition of Sickness), or a person who is likely of becoming sick due to living habits or heredity is viewed as a risk to a company. The risk is that the sick individuals to be costly to insure. Insurance company look at a person who is sick as an expected loss in profits, and thus does not want to accept the risk. I think it’s valid tool for decision making for the company itself, however not valid for a consumer. I do not know what could replace actuarial fairness from a business aspect. I personally believe that instead of insurance companies punishing people with poor health by not providing coverage, insurance companies should accept consumers based on economic status, age, and sex and- not overall health. I also believe that insurance providers should promote health upon all their consumers. Insurance companies should consider doing more free screenings, focus on preventative care, and provide fitness opportunities. This could be a win-win situation for both the business and patients.

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