> I think the point parent is making is that there's (nominally/supposed to be) smoothing across people too. The uncharitable description is that "healthy peopl

> I think the point parent is making is that there's (nominally/supposed to be) smoothing across people too. The uncharitable description is that "healthy people are subsidizing sick people" That's a common refrain, but it's wrong and misleading. It's why people talk about young and healthy people being "necessary" to balance out the costs of the older and sick under the ACA. That's describing a redistribution scheme, not insurance. > But the insurance also has price proportionate to the chance she will need it. No, they don't. They price based on age, sex, zipcode, income, and smoking status. That's only very loosely related to the chance that she will need it. It's nowhere near enough to provide precise pricing. > The more finely the chance it'll be needeed is known, the more closely individual prices will match the probability, and thus less smoothing will take place. No, that's another common misconception. The price is not determined by the ability of the insurer to predict the probability of the risk; that's what determines the insurer's profit margins. Under a free insurance market, the price is determined by the relative demand and supply of patients and insurers.