The Insurance Pool
Health insurance is a mechanism for pooling risk. Medicare for All is a proposal for extending an existing version of that mechanism to everyone. This piece explains both — how insurance works, where it went wrong, and what “Medicare for All” actually means.
Health insurance is a mechanism for spreading financial risk across a large population so that no single person bears the catastrophic cost of serious illness alone. Everyone pays in, and everyone draws down when needed. Across a lifetime, most people are sometimes healthy, and sometimes need medical care. The function of insurance is to spread the cost of care across users. Insurance functions differently from a normal consumer market.
A productive market system (fair profit for a valuable service) requires something insurance cannot provide: a real exit option. A functioning market depends on customers who can walk away — who can comparison shop, switch providers, or go without. Competition disciplines prices and quality only when exit is possible. Remove the exit and you remove the mechanism that makes markets work.