Anthony Weiner Doesn't Understand How Insurance Works

Funny that, a congressman hailing from (and who wants to be mayor of) the financial capital of the world doesn't even have a rudimentary understanding of insurance. In this segment of Morning Joe, he presses the hosts to describe what value insurance companies provide. Gee, that is a hard one - how about INSURANCE, namely the promise to cover large potential expenses that are contingent on future events. Insurance companies take on the risk that you will get sick and incur healthcare costs. Without someone to take on the risk, all your costs will come out of your pocket. Weiner goes on to talk about how insurance company profits extract $230 billion "from the system." Again, pure ignorance. Insurance companies of all stripes make money on "float" - the ability to invest and earn investment income on your money between the time when you give it to them and the time when they have to pay it back to you in the form of claims reimbursement. That's what they get in return for your risk that they assume. Insurance company profits come from investing in stocks, bonds, and other stuff, not from extracting money from the healthcare system.

Of course, I jest. No doubt Sausage Factory Worker Weiner (man, I love writing that!) does understand how insurance works, alas, which makes nearly everything that comes out of his mouth in this segment a pernicious lie.