I'm not sure I've seen this argument in quite this form before, and if so it is likely because I'm completely off base here.  But here's a random thought on healthcare I've been toying with.

It seems the problem with the health insurance system is that we don't really have a health insurance system anymore.  Insurance, at least as traditionally understood, is a product you buy hoping you're not going to use it.  And indeed, you're not likely to use it.  In fact, you're probably better off if you don't ever use it.  As such, you are probably going to lose money in the long run.  But you spend the money anyway, because of the absolute calamity that would ensue if you drew the short straw without being covered.

Consider car insurance.  I just did some rough calculations, and I've spent about $25,000 on car insurance premiums during my driving career.  I've never caused an accident, so I've never really gotten anything out of this.  I've been hit a couple times, and my insurance kindly paid for my repairs before collecting from the other drivers' insurance.  But the total damage to my car was less than $25,000, so I'd still have been better off not buying car insurance and taking the losses when I got hit.  If I was Bill Gates, I would arguably be better off not buying any type of insurance, since I could afford any loss in the unlikely event I suffered a huge loss.

But for an economic mortal like myself, the fact is that if one day I was driving my car and got distracted by my son in the backseat and ran a redlight and hit someone, well, I could be absolutely financially wiped out without insurance.  Car insurance protects against the increasing marginal cost that comes with above-normal liability.  It spreads the risk through society of catastrophic car accidents, and even though the insurance companies' actuaries make certain that society as a whole places a losing bet financially, it prevents unlucky individuals from being wiped out, which imposes other costs on society.  It's kind of win-win.  But again, the idea is that most people will never, ever have to use their insurance.

I guess health insurance probably used to be like that.  For most things there wasn't much the doctor could do.  When Ike had a heart attack, he got prescribed morphine and bedrest.  This was the President of the United States, so I'm assuming that's the finest care we had to offer.  Insurance protected against the few catastrophic costs that were associated with health care at the time, and again, for the most part you didn't use your insurance much unless something really bad happened.

But today, almost everyone will use health insurance at some time in their life; if you're out of your twenties and have a family you probably use it several times a year.  I've had a couple of major surgeries and have a major medical procedure yearly, and I'm in my 30s.  My 2-year-old son has had two surgeries.  All of these are very expensive, including the aftercare.

In other words, we've reached the point where we don't have a system of health insurance anymore.  Having health insurance is kind of like having property tax insurance -- you're know you're going to get a big bill every year, so the idea of purchasing insurance for it is kind of silly when you come down to it.  Bill Gates stands a reasonable chance of coming out ahead by purchasing health insurance, which is part of why premiums are so high.  So I think the issue isn't so much an issue of "health insurance for all," so much as moving to a more rational health care financing scheme.  But all the talk of health insurance reform increasingly strikes me a pounding a square peg through a round hole.

I'm not certain if this is right, and I'm not 100% sure what the policy implications are -- I can think of plenty for the left and the right that would please their respective sides.  But I think this is an interesting frame of the problem, so I thought I'd throw it out there.  Thoughts?