It does not stop being insurance even when a payout is a virtual certainty. It just costs more.
All insurance socializes risk by transferring money to those with greater needs from those with lesser needs. That’s why we have it — none of us know for sure which group we are in.
All insurance creates free-rider problems, since all of us would prefer that our carriers pay and that we not pay. Insurers are thus adversarial to the insured, whether the insurer is the government or a private carrier.
Any insurance policy can cost more and cover first dollar losses or cost less and carry a deductible. In this respect, there is no difference in principle between car insurance and health insurance. If you want first dollar coverage for your car repairs, it will cost you a lot. Same for your doctor bills.
Nor does a generational subsidy from healthy young people to less healthy old people make it “not insurance”. After all, with car insurance, older “wreckless” drivers subsidize young reckless ones.
Well-written column, but I think fundamentally wrong unless I missed something.
