Today we will consider a model for replacing our current form of government with an insurance-based model.

In step one of this hypothetical future, the government of the United States buys every insurance company in the country at estimated current values. In this imagined future, the government becomes the insurance provider for the country, and perhaps the rest of the world. The profits from selling insurance will eventually replace taxes. Our government would become a for-profit enterprise.

In a way, the U.S. is already sort of a big insurance company. When something catastrophic happens, from hurricanes to war, the government steps in. I'm suggesting we formalize the arrangement and try to monetize it, with most of our profits coming from international sales.

Remember that an insurance company does more than just collect premiums and pay out for losses. They also work to reduce risks. This is similar to what a government tries to do for its people. Governments urge you to quit smoking, and they force you to wear seatbelts. Governments form armies to keep the homeland safe. Governments fund schools to keep future generations from needing aid. For all practical purposes, the government is already a big insurance company. All I'm suggesting is that we become more efficient at it, and make some money in the process.

Think how much the rest of the world would pay for our military protective services. It has to be a lot more expensive for a country to have its own military than it would be to pay for insurance against unlikely attacks. Obviously some countries would keep their own armies out of pride, or fear, or tactical preference. But I can imagine a few hundred smaller countries preferring to pay insurance for military and diplomatic protection.

The U.S. probably has the best disaster emergency resources in the world. We should be selling those services in the form of insurance policies. If the tsunami hits, we swoop in and rebuild towns and provide emergency services up to some predetermined limit. Perhaps we would still help the uninsured, just to be good neighbors, but at a lower level, and funded only by donations.

The thing I find interesting about insurance as a new model for the government is that it would lead to practical laws, especially if law makers had some sort of profit motive. For example, you might see the legalization of any activity that lowered financial risks. I think you'd find that in most cases, the majority of citizens coincidentally support just about every policy that saves money in the long run. That's because the best way to save money in the long run is to keep citizens safe and healthy and prosperous.

Obviously there would be danger in allowing a profit motive for government officials. The press would have to be our watchdogs. Assuming some transparency of decisions, based on published actuarial tables and budgets, there shouldn't be too many surprises in what choices the government makes.

In this imagined future world, politicians are still elected by the people. And the big moral issues could still be decided based on cultural preferences over profits. The difference is that the voters would always have an estimate at hand to see how much those preferences might cost them. For example, if the majority of citizens prefer to keep doctor-assisted suicide illegal on moral grounds, that's fine. But citizens would have access to a government-provided estimate on how much that decision costs the economy.

Another benefit of the United States of Insurance is that citizens would have just one policy for all sorts of risks, including automobile, health, home, personal liability, and so on. Your premium costs would depend on your specific situation. Just check all of the appropriate boxes on a web page, and enter your bank account number for automatic deductions. You just paid your taxes and handled all of your insurance needs in ten minutes.

I can imagine that becoming the United States of Insurance would make the world safer in the long run. Imagine two smaller countries spoiling for a fight, and one of them is an insurance client. The plodding and ineffective United Nations would be irrelevant, but the United States of Insurance would step in fast to protect its investment. No one would ever misjudge its intentions because its motives would be entirely transparent.

The insurance model would also remove unproductive emotions from international affairs. Many of our problems in the world seem to revolve around which leaders have bruised egos, who is getting snubbed, and that sort of thing. If the United States of Insurance started making decisions based on actuarial tables, other countries would find it hard to find any negative emotion other than boredom.

The biggest leap of faith in this thought experiment is that the government could do anything right. But consider that 90% of private businesses eventually go belly up. If you could measure the performance of your government the way you measure the performance of private companies - by profits, and the government leaders themselves had a profit motive, how efficient could government become? The United States of Insurance would allow that sort of profit measurement and incentive.

I agree that this imagined future can never happen. We don't have the sort of government that can change. It's just interesting to think about.

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May 6, 2010
Old idea. Back in the good old days, several European nations introduced profit motives for doing the governments business. Sometimes it was called "colonizing" (The Dutch East India Company, The British South Africa Company), sometimes "privateers" or "piracy", sometimes "slavers" but it really depends which side of history your family was on. The British Prize Act of 1864 gave Royal Navy crews a substantial percentage of the value of enemy cargo ships captured. (http://bit.ly/bjSO08) Up to a quarter of the enemy cargo for the Navy captain alone.

Works splendidly for the first hundred or so years but tends not to look too good on the history books after a couple of hundred years though. It's a chance for us to die rich and it'll be someone else's image problem at the end of the line (i.e. our children, or someone else's children if you're a non-breeding techie.)
0 Rank Up Rank Down
Apr 18, 2010
Step One is flawed, where the US buys all the insurance companies.
Using what money? Adding another trillion or so in debt? And who do you think buys that debt? Right, insurance companies, among others! Or even better, more foreign companies and/or governments, who could then use that debt as a 'Get Out of Jail Free' card when the US of I is supposed to attack it in defence of an insured country.


Apr 17, 2010
very interesting site to get the anime info n all.regarding iinsurance plans ,here The society is facing problems with such laws. This has to go legal
and it’s needed to be sorted at the earlier.
<a href="http://yeshomeinsurance.com " rel="dofollow">Home Insurance</a>
Apr 15, 2010
"By having the government run it you can avoid monopoly pricing."

Nope, you introduce a monopoly instead of avoiding one.
The government now has the monopoly and can (and will) charge whatever they feel like.
And where a private party has to go through all kinds of legal (costly) hoops to get their money back if you don't pay up (and cheaper competitors will always appear if prices get out of hand), in a government run system they have the police and military to enforce it.
Don't pay? Get sent to a work camp for a few years of hard labour.
+2 Rank Up Rank Down
Apr 14, 2010
Insurance (all that is funny occurs in Monty Python):

Dino: My brother and I have got a little proposition for you Colonel.

Luigi: Could save you a lot of bother.

Dino: I mean you're doing all right here aren't you, Colonel?

Luigi: Well suppose some of your tanks was to get broken and troops started getting lost, er, fights started breaking out during general inspection, like.

Dino: It wouldn't be good for business would it, Colonel?

Colonel: Are you threatening me?

Dino: Oh, no, no, no.

Luigi: Whatever made you think that, Colonel?

Dino: The Colonel doesn't think we're nice people, Luigi.

Luigi: We're your buddies, Colonel.

Dino: We want to look after you.

Colonel: Look after me?

Luigi: We can guarantee you that not a single armoured division will get done over for fifteen bob a week.

Apr 14, 2010
Bottom line here is that public health care =/= socialism. Massachusetts has had it for a while now, and I'd say it's a pretty patriotic state.
How has that turned out for Massachusetts? I believe the word that best describes it is "horrible." They are rationing health care there as there are not enough primary care doctors to cover all those who want coverage. Getting doctors into primary care is a problem without universal health care, but this will exacerbate the problem.

Additionally, it is the right of a state to institute such a policy but unconstitutional for the federal government to do so.

Please read this document Detton, it'll be a revelation to you.
0 Rank Up Rank Down
Apr 14, 2010
The problem with insurance is that the federal government already got involved. Look at the difference in reported income for insurance CEOs between state and federal goverments.
www.insceo.com is a site that has raw data.
+2 Rank Up Rank Down
Apr 14, 2010
A couple of the problems with arguments against this - as I like to play Devil's Advocate - are thus:

"North Korea could buy insurance, attack South Korea..." - The government, I assume, wouldn't' be forced to insure anyone who demands it. There would probably be provisions against them doing that sort of thing if they managed to get such insurance by lying to us about their motives. Current insurance policies are pretty menacingly large documents for INDIVIDUALS, the government could put in any kind of requirement for that sort of thing that it wants.

"A corrupt government would screw over it's citizens even more." This is a theory/mind game. In the context of this thought experiment, the public has the right to vote in/out officials and direct the actions of the government (an actual Democracy, rather than a representative republic, which is what we have). Also, with records being public - and ideally a population that CARES enough about what it's government is doing to look at them - this would limit corruption by quite a bit.

"Socialism!" Why is it that the only time socialism is ever mentioned is in the context of health care? There's a lot more to that system then just giving every person an equal chance at, say, LIVING through an illness that's easily preventable. And if the costs have to be shared across the country, isn't that your responsibility as a citizen to live in the country? You could always move to some third world nation and live like a king on your bank account... Bottom line here is that public health care =/= socialism. Massachusetts has had it for a while now, and I'd say it's a pretty patriotic state.

As you say, Scott, it's something that can't happen, but interesting to think about as an experiment.
Apr 13, 2010
There was a 1955 sf book, "Preferred Risk: by Fred Pohl and Lester Del Rey, where that happened. If memory serves, the Insurance Company eventually decides to kill all the populace to save the cost of payouts.
Apr 13, 2010
Isn't your idea called 'socialism'? Hey, I'm not taking sides here, just saying.

One of the earlier commenters might already have made the same point, I dunno, but if so, they didn't get to the point in the first two sentences so I didn't read them, sorry.
Apr 13, 2010
So basically you are proposing a world monopoly on the insurance industry, right?
But would not be a bad monopoly, but a benign oligarchy overruling pretty much the world.
Aren't those the kind of things that we try to avoid today anyhow?

Aren't these the kind of things that lead to revolutions

Plus... on the numbers side, it wouldn't work.
Insurance is based on risk management, and therefore predictability of events.
When you are insuring unknown scenarios like total destruction, invasions, natural disasters, etc., where each event is pretty unique.the numbers will be waaay off.
Either you will lose big time or become so expensive that no one will care for your business.

Apr 13, 2010
I'm not particularly interested in giving you the power to vote away my rights simply because you cooked up an actuarial table that makes it look like a good financial decision.

As it turns out, totalitarian governments start out very popular because they promise exactly this trade off. Give up a few of those freedoms you're not personally using in exchange for a safer, more efficient society.
+1 Rank Up Rank Down
Apr 13, 2010
Outsourcing our military can't work. The guy giving the North Korea example touched on it a bit.

What if two countries that are currently friends, both sign up for USI military insurance and then have a disagreement and go to war?

The only option would be for USI to limit it's customer base to current NATO countries or "friendly" UN members. In addition, you'd have to have a clause that countries with USI coverage, could not declare war or expect the USI policy/military to get involved in a war with other country that also has coverage. Who's going to go for that?
Apr 13, 2010
I like the idea.

But note that when Americans say they want "insurance", they don't mean insurance.
They mean they want the government to pay for stuff. Very different.
Apr 13, 2010
You have a basic flaw in your argument saying that "the best way to save money in the long run is to keep citizens safe and healthy and prosperous". Keeping people safe and healthy is on the contrary very uneconomic. At the age of 65 they will stop working and demand pensions and by the time they hit 80 or 90 years old their needs for medical aid will be gigantic compared to the needs of a non-retired. If people would smoke, drink and get fat enough so they died at an appropriate age the country, and insurance companies, could save a lot of money.
In reality, the United states of insurance would encourage people to live unhealthy, unsafe lives to keep premiums down.
+4 Rank Up Rank Down
Apr 13, 2010
Government, insurance, and banking. The government is already in bed with the big banks, we all saw that in action; why not combine it with insurance and merge the three biggest criminal enterprises in this country into one entity. Thats very forward thinking of you.
Apr 13, 2010
"If you could measure the performance of your government the way you measure the performance of private companies - by profits, and the government leaders themselves had a profit motive, how efficient could government become?"

In other words: If you measured the performance of government based on how well they could screw us over, how efficient could government become?. Yes, I believe they would do very well!
0 Rank Up Rank Down
Apr 13, 2010
I like it. The other side benefit that you don't mention is that insurance is more efficient the larger the pool of risks. By putting all insurance in the same pool you theoretically get the optimal insurance system. By having the government run it you can avoid monopoly pricing. This is the case for the single payer option by the way. What you would lose in theory by having government take over the insurance system is the competitive innovations that the private sector is good at. However, the concept of insurance hasn't really changed in the last 100 years all the innovation has been how to improve profits... which generally haven't improved coverage for the policy holder.
Apr 13, 2010
"Remember that an insurance company does more than just collect premiums and pay out for losses. They also work to reduce risks"

This is flawed. Insurance companies work to maximise collected premiums while denying payouts even for things that are covered.
The only reason to pay out at all is because there's the threat of courts telling them to if they are in breach of contract.
Were the government to be the sole insurer, as well as controlling the courts (which they of course will continue to do) there'd be no reason for them to ever pay out anything while being able to squeeze every last cent out of you in "premiums".
Oh wait, that's the way the current government already works, except we now call it taxes.

"Tell that to the victims of Hurricane Katrina. "

There the federal government had the resources available and ready to move in, but were blocked by local officials whose political agenda benefitted from not providing disaster recovery.
So the premise that the US government does not have the required resources is false. It was politics and bureacracy that prevented those resources from being employed in a timely and efficient fashion (as is always the case when government agencies are involved).
Once recovery efforts did get underway things moved smoothly and efficiently.

"Don't they call that a 'protection racket'? "

Most government services come down to just that, as does a lot of what insurance companies do.
"Either you pay up or else we send the courts/police/collection agency after you", with the full knowledge that they can charge pretty much whatever they wish with full legal protection.
+4 Rank Up Rank Down
Apr 13, 2010
Interesting premise. The insurance premium replaces personal income tax, but what about company tax, sales tax, payroll tax, all the other "taxes" that are hidden in the system? Who pays them?
What if i choose not to pay the premium? I'm uninsured? if I have a heart attack walking down tghe street and an ambulance takes me to a public hospital will they tip me back out in the street because I'm uninsured or will they they fix me up?

Apart from that, the internal premise sounds a lot like socialism in practice with nationalised industry. The external premise of offering insureance to other nations sounds a lot like a protection racket.
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