That's an excellent point. Adverse selection is a real problem because some people can have a very good idea of what their bills will be. If it's cheaper to pay out of pocket they'll do so, but if they could save money by buying insurance they would do so.
Another part of that problem is that the price is all wrong. People who have very little risk of dying regularly buy health insurance in part because the premiums are so reasonable. $200 a year (or whatever it costs) is such a small amount of money for so, so many people that you're a fool not to buy it if you have dependents.
If you could pay the actual market rate at the doctor's office -- the rate the insurance companies get -- you could afford most medical problems out of pocket. I mean it's demonstrably true, the insurance companies don't pay out more than everyone pays in so by default we can all afford to pay for healthcare. What we can't all afford to do is pay $50k for big procedure X or $200k for cancer treatment Y. But those are major medical type issues which we can insure for not horrific amounts of money.
The adverse selection problem can be solved in large part by having affordable major medical that makes you an idiot not to take it. I can totally understand why single people in their 20s aren't keen on shelling out $450 a month for insurance. But $20-$50 a month? That's less than car insurance or a cell phone or cable. Save $400 a month on insurance and you could afford to get ACL surgery every couple of years!
But here's the thing: if you want to buy your own insurance you can't 1) because of the adverse selection issue and 2) because an already high price would get about 30% higher as you get taxed on that money.
Another part of that problem is that the price is all wrong. People who have very little risk of dying regularly buy health insurance in part because the premiums are so reasonable. $200 a year (or whatever it costs) is such a small amount of money for so, so many people that you're a fool not to buy it if you have dependents.
If you could pay the actual market rate at the doctor's office -- the rate the insurance companies get -- you could afford most medical problems out of pocket. I mean it's demonstrably true, the insurance companies don't pay out more than everyone pays in so by default we can all afford to pay for healthcare. What we can't all afford to do is pay $50k for big procedure X or $200k for cancer treatment Y. But those are major medical type issues which we can insure for not horrific amounts of money.
The adverse selection problem can be solved in large part by having affordable major medical that makes you an idiot not to take it. I can totally understand why single people in their 20s aren't keen on shelling out $450 a month for insurance. But $20-$50 a month? That's less than car insurance or a cell phone or cable. Save $400 a month on insurance and you could afford to get ACL surgery every couple of years!
But here's the thing: if you want to buy your own insurance you can't 1) because of the adverse selection issue and 2) because an already high price would get about 30% higher as you get taxed on that money.