I will not be surprised if you missed this movie. While it is based on something we all love, The Darwin Awards, those delightful and often unbelievable tales of idiots removing themselves from the gene pool through gross stupidity, the movie which attempted to follow them comes up a little short.
Since you probably haven’t seen it let me give you a quick summary. The film follows Michael Burrows (Joseph Fiennes) a former police profiler, after losing his job, tries to get a job at an insurance firm by showing them they can refine their models for risk by finding common denominators between the Darwin Award winners who cost the insurance company millions every year. He is joined by an insurance investigator (Winona Ryder) as they investigate several Darwin Awards cases looking for the common thread between all of them. Sadly most of the Darwins they investigate are the famous urban legend versions of the Darwins (such as the famous JATO rocket incident) rather than real Darwins even though they’re presented as real in the film.
And it is this attempt to create a profile for an insurance company that the economics comes in. The point of creating such a profile, if one were possible, (I’m not sure one is, but I would almost bet that for the next few years Obama, Santorum, Paul, and Gary Johnson voters will make up a disproportionate amount of Darwin Award winners*), it would be for the creation of an actuarial table. This table would be used to set new rates for people with these risk factors, rates that would be higher so as to ensure that people with these factors either survive or at least pay enough that they don’t cost the insurance company their profits.
Now, right about now I can hear some people gasping with shock that the evil really mean and bad insurance companies would actually charge the idiots that really insurance more for their insurance. Dry reason that they actually need insurance. To which I respond: duh. What did you think, insurance was somehow different than every other business in the world. They’re out to make money. Every business is out to make money. If it’s life insurance then they’re betting that you will live longer than you’re insured for and you’re betting that if things go wrong your family will be taken care of. And they adjust your premiums to reflect how much of a risk you are so to ensure that even if they do lose their bet and you die prematurely, they still will make a profit. It’s the only reason they do what they do.
Now some fool out there is probably thinking, but I have a right to health insurance, it’s not there just for some business to make money. Again, I respond: No you don’t and that is the ONLY reason they do what they do. You do not have a right to anything provided by someone else…if it’s provided by someone else you only have the right to negotiate with them trading one thing of value for another. Health insurance especially because you don’t have the right to tell doctors, nurses, drug companies, medical equipment companies and all the rest you shouldn’t have to pay them for the time and energy and study and research they have put in just because you want something.
But, but, but…those actuarial table make prices so high, the whine goes. Wrong. What made those health care prices so high is the HMO’s the government created which ruined the system set down in those actuarial tables**.
The point here, as is made reasonably clear is that the insurance companies aren’t evil. Just like you they’re trying to make an honest living, and due to that they will hold you to the agreement you made and, just like you, will try to get the most out of it that they can. And as Adam Smith showed us by both looking out for their own interests everyone benefits.
*Yes I really do think they’re all that stupid.
**And let’s keep in mind those HMO’s were created to solve problems created by the Great Society of LBJ, which were attempting to fix problems that at their core were caused by the New Deal, which was trying to fix problems caused by Hoover and the Smoot-Hawley Tariff, which was attempting to fix problems caused by bad policy by the Fed…notice a pattern here? Doesn’t solve problems, it attempts to solve problems it created and only ends up creating more problems.