In populations where people self-select for cover for health insurance and it is not mandatory no degree of insurance is affordable for anyone: those who are healthy and who would subsidise those who are not would tend to leave, raising the risk profile and costs leading to a new marginal group who would leave. Until the worst risk members would be clustered and they would not be able to afford the premiums as a class. In populations where people have mandatory health cover and where risk / morbidity is normally distributed, 2/3 would be much better off than without such mandatory cover and 1/6 would be very badly off with such mandatory cover. The remaining 1/6 could live with it, if unhappily. However, risk / morbidity is not normally distributed, nor is it binary. Those with the worst risks are least able and least inclined to deal with them.
This means that mandatory health insurance is unfair to those who take care of themselves - however large a minority they are. How responsible people are depends also on their level of development. (This is also why HIV prevention efforts are doomed to fail: those most at risk, <25, are not able to adopt the behaviours necessary to make a difference. And preventing MTCT simply delays infection by a median of 15 years – not accounting for child rape.)
So, insurance that is not mandatory and non-profit has to discriminate against a large proportion of any population. It also has to rely on imperfect information, non-rational choices, and high transaction costs.
What do you insure against? Why?
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