It's an analogy. If you accept the premise that the market for health insurance has similar properties to the market for flood insurance, namely that the inform

It's an analogy. If you accept the premise that the market for health insurance has similar properties to the market for flood insurance, namely that the information about who needs it is readily available, then those two markets are broken in similar ways. I do get what you are saying though. Why do we let people live in flood plains when they can't afford to have their homes be destroyed? In other words, if they don't have the means to self-insure. Well, we could have the government regulate flood plains and forbid anybody from building homes there. But there are already homes there, so that ship has sailed. So basically, the government, representing the collective will of the people, has decided that it won't let people's lives be destroyed, even if they decide to live in a risky area. If you apply this logic to health insurance, there are people who are uninsurable in exactly the same way as having a house in a flood plain makes you uninsurable. If you have cancer already, no insurance company will insure you against cancer. There's no chance of you net having cancer. The costs are known. Asking for insurance is like trying to get something for free. But as a society we probably don't want these people to just die because they aren't insured. So we have to all agree to some solution that doesn't depend on private insurance.