Insurance Books

Well researched and thought out...but unreadable due to its painful writing..more authors in the financial markets should consider using a ghost writer, someone to be sure to keep it interesting (entertaining) as well as informative..

this is an exxellent bokk to use as an inspiration to achieve your desired goals of what ever you desire

Book Review: The Healthcare Fix

Laurence Kotlikoff is an economics professor at Boston University. Mr. Kotlikoff thinks he's the Man with the Plan for universal healthcare in the U.S. The book he's written is a short, fast read which presents a straightforward message:

Medicare and Medicaid, because of their billing policies are bankrupting the country by feeding healthcare inflation. The fix, according to Kotlikoff is to scrap the two federal programs and replace them with universal health adjusted medical insurance vouchers. A young healthy individual would receive a small voucher say $5000 per year while an older less healthy individual would get a voucher of say $50,000 to buy a full private insurance policy.

This would incentivize private insurers to write policies for these insured as follows. If the oldser only needed $10,000 in health spending for the year the insurer profits by $40,000. OTOH if the youngster was hit with a $30,000 medical expense the insurer would take a -$25000 hit. The latter is less likely than the former. Also, the vouchers would be health history adjusted so that the older patient might get a lower voucher for having a good year.

What's attractive about Kotlikoff's fix is that the voucher system has a built in mechanism for monitoring spending, it eliminates cherry picking of patients and it's universal. However, as is the case with a short somewhat glib book Kotlikoff glosses quite a bit. He even glosses in error.

In one example he mischaracterizes Mitt Romney's role in signing a law that charges $300 per employer annually to fund health insurance for all in Massachusetts. The $300 fee was passed OVER Romney's line item veto. The main part of the bill is a punitive mandate that requires all taxpayers* acquire health insurance. Those who don't face monthly penalties enforced by Massachusetts' version of the IRS. The MA health insurance law funding comes in part from the $300 fee but mostly from shifting uncompensated healthcare funds to subsidizing premiums for poor and lower wage workers. The Massachusetts law does little to contain the soaring costs of the commonwealth's pet industry.

This kind of glossing is what troubles me about this otherwise interesting and provocative book. Kotlikoff is hardly naive about the economic and political realities facing his proposal. Libertarians don't like government programs. Healthcare professionals feel entitled to unlimited compensation. Patients want the best healthcare others' money can buy. Hospitals love their high tech profit centers. Then there are the miriad of big and small suppliers that profit from over priced products, waste and techno-churn.

America's healthcare problem is not the lack of universal healthcare. It's the lack of universal fairness in health insurance. Employer ensured workers, especially high income professionals, have their premiums paid. But they pay no taxes on this imputed income. An uninsured taxpayer showing up at the hospital had better have a bunch of high balance credit cards and be prepared for bankruptsy. Yet his taxes compensate for the lower taxes of his fortunate and better paid neighber. Kotlikoff would do away with this asymmetry and use the 'higher taxation' to help fund his scheme. One could expect Republicans to rail agaist this while Democrats knee-jerk against vouchers. He also suggests savings and thus funding could be found in reducing administrative costs in the healthcare system. Good luck on reducing hospital fat and red tape. One other loose end in Kotlikoff's plan is where do the insurer's profits go? Shareholders? High CEO pay? Into lower premiums?

Notwithstanding its holes and loose ends Kotlikoff has made a provocative case that is a must read piece of food for thought. Regardless what you think of his proposed fix, Kotlikoff is right about one thing ... Our profligate healthcare industrial complex is threatening our fiscal future.


* In Massachusetts a young tax cheat can earn buy one of the special subsidized young person's
policies which doesn't require proof of income.

Hidden Markov Models have come into vogue in recent years in various fields. Notably automatic speech recognition. An HMM is useful in a Bayesian context, where you have to work back from some observations to discern an underlying probability model that is supposedly generating those observations. Often in the presence of noise. Well, it turns out that this general description can also be applied to financial models, which is the book's subject.

Various specific models are tackled. Including the seminal Black-Scholes, where the security market is modelled as a Markov modulated Brownian. Typically, the maths in the book uses sophisticated probabilistic analysis and often assuming Markov processes. As an aside, if your field is electrical engineering or information theory, where you might have used Markov processes, then your background should suffice if you want to migrate to finance. It's not that different, at a certain conceptual level.

The book could be improved by the addition of an index.

Fascinating read about LLoyd's and the development of marine insurance. A lot of the issues faced in the 1700's are still pertinent today. This book was published in 1876, but you would not know it.

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This is a good book but it can get a bit confusing the way it is laid out where you have to flip back and forth between the chapters. Chapter dividers would be a nice addition. I made my own. The price is good on Amazon whereas at my college bookstore they wanted $107 for it.

Leo Davies epitomises success with his work & in his world
yet he has vulnerability. As this book & as the series of books
about Leo, progress, he develops a greater understanding of
himself. Leo started off arrogant but age is humbling him.
What will happen to Leo when he gets old?
After an initial attempt at custody, he gave his son Oliver to his estranged wife, Rachel. He was forced to do this as his
emotions compromised his judgement. For the first time,
Leo failed. Yet Leo has grown emotionally & may for the first
time start to realise how to find happiness with other people.

Caro Fraser has an excellent ability to understand the conflicts
& compromises that people make in the fulfilment of their lives.
I cannot wait to read what happens to Leo, in her next book.

I used the book as a primer to the industry - a precursor to inheriting the insurance vertical as part of my sales territory. Would recommend this to anyone looking for a high level introduction and understanding.

This book is concise and well written. It has a good sampling of information for anyone interested in the insurance field or who currently works in it and wants to know more.

The glossary of terms at the back of the book is a good tool for anyone starting out in the field.