Case Study-Insurance

.docx

School

Royal Melbourne Institute of Technology *

*We aren’t endorsed by this school

Course

ACCT 1085

Subject

Philosophy

Date

Apr 3, 2024

Type

docx

Pages

Uploaded by DrHerringPerson617

Case Study: Insurance and Genetically Inherited Diseases (B&D p.179) 1. Discuss the questions following the case study. Do you consider it to be unethical for insurance companies to charge high-risk people a higher premium than low-risk people? Arguments for Charging High-Risk Individuals Higher Premiums: 1. Utilitarianism :  Pros : Higher premiums for high-risk individuals maximize overall utility by ensuring that insurance remains affordable and accessible for most policyholders. It allows insurance companies to manage risk effectively, preventing financial instability and ensuring the sustainability of the insurance market.  Cons : Charging high premiums may create hardships for high-risk individuals, potentially leading to reduced access to healthcare and poorer health outcomes, which could undermine overall well-being. 2. Deontology :  Pros : Charging high premiums aligns with the principle of treating individuals as ends in themselves, as it allows insurance companies to fairly assess risk and set premiums accordingly, regardless of individual characteristics or preferences.  Cons : This approach may overlook the duty to prioritize the well-being of vulnerable individuals, potentially leading to discrimination against those with pre-existing conditions or genetic predispositions. 3. Justice & Fairness :  Pros : Charging higher premiums to high-risk individuals can be perceived as fair and just, as it ensures that individuals bear the costs associated with their own risk factors rather than shifting the burden onto low-risk individuals. It promotes fairness in pricing and prevents exploitation of the insurance system.  Cons : This approach may perpetuate social inequalities, as it places a disproportionate financial burden on high-risk individuals who may already face socioeconomic challenges, potentially exacerbating disparities in access to healthcare and insurance coverage. 4. Virtue Ethics :  Pros : From a virtue ethics perspective, charging high premiums demonstrates prudence and responsibility on the part of insurance companies, as they fulfill their duty to manage risk effectively and maintain financial stability. It also reflects integrity by transparently pricing policies based on actuarial principles.  Cons : This approach may lack compassion and empathy for high-risk individuals, failing to consider their unique circumstances and needs. It may prioritize financial considerations over the broader ethical obligation to ensure equitable access to healthcare and insurance. Arguments against Charging High-Risk Individuals Higher Premiums: 1. Utilitarianism :  Pros : Charging lower premiums to high-risk individuals may maximize overall utility by ensuring that everyone has equal access to essential healthcare services, regardless of their risk profile. It promotes the greatest happiness and well-being for the greatest number of people.  Cons : This approach may lead to adverse consequences such as increased financial strain on insurance companies, higher premiums for low-risk individuals, and potential market instability, ultimately reducing overall utility. 2. Deontology :

 Pros : Charging lower premiums aligns with the duty to prioritize the well-being of individuals, particularly those with pre-existing conditions or genetic predispositions, who may face barriers to accessing healthcare. It respects individuals' autonomy and dignity by not penalizing them for factors beyond their control.  Cons : This approach may overlook the duty to act fairly and transparently in setting premiums, potentially leading to exploitation of the insurance system and undermining the principle of equal treatment under the law. 3. Justice & Fairness :  Pros : Charging lower premiums promotes fairness and equality by ensuring that individuals are not unfairly penalized for factors beyond their control, such as genetic predispositions or pre-existing conditions. It prevents discrimination and promotes social justice in healthcare access.  Cons : This approach may create challenges in maintaining actuarial fairness and market stability, potentially leading to higher costs for low-risk individuals and market distortions that undermine the affordability and accessibility of insurance for everyone. 4. Virtue Ethics :  Pros : Charging lower premiums demonstrates compassion and empathy for high-risk individuals, reflecting a commitment to fairness, solidarity, and social responsibility. It prioritizes the ethical values of caring for the vulnerable and ensuring equitable access to essential services.  Cons : This approach may overlook the virtues of prudence and responsibility in managing risk effectively, potentially leading to financial challenges for insurance companies and compromising the sustainability of the insurance market in the long run. 2. Are insurance companies acting responsibly when they require customers to disclose medical information and/or submit to a medical examination? Insurance companies asking for medical information and exams can be seen as responsible from various ethical perspectives: 1. Utilitarianism : It's good because it helps keep insurance costs balanced for everyone. For instance, if insurers didn't collect this data, premiums might rise for everyone, making insurance unaffordable. 2. Deontology : It's fair because insurers have a duty to be honest and transparent. By gathering health data, they can set fair premiums and let customers make informed choices about their coverage. 3. Justice & Fairness : Requiring this information ensures fairness. It stops high-risk individuals from unfairly burdening low-risk ones with higher premiums. Without it, insurance could become unfair and discriminatory. 4. Virtue Ethics : It shows responsibility and integrity. Insurers need to manage risks well to protect everyone's interests. Being thorough in assessments reflects a commitment to fairness and transparency. Real-world examples:  Utilitarianism : In the Affordable Care Act in the US, requiring everyone to have health insurance helps spread costs evenly, keeping premiums lower for everyone.  Deontology : Companies like John Hancock offering discounts for healthy living habits. They encourage transparency about health and offer incentives for healthier lifestyles.  Justice & Fairness : The Genetic Information Nondiscrimination Act in the US protects people from discrimination based on genetic information, promoting fairness in insurance.  Virtue Ethics : Companies like Vitality in the UK promote healthy living through rewards and discounts, aligning with values of responsibility and integrity. 3. 3. Argue either in Favor of or opposed to 'Senator Cowan's proposed legislation.

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help