Blissex comments that the health insurance business has changed. Insurance companies no longer pool risks across individuals but they still serve a useful purpose by spreading risk and expense over an individual's life cycle.

It is an interesting model. If Wonks Anonymous understands it correctly, the consumer pays for health insurance as a form of "savings". When the consumer gets sick the insurer "lends" her the money for health care and then takes repayment in the form of higher premiums for future policies. The insurance companies take a risk that the insured will not repay the "loan" which might explain their high rates.

Now a system of this sort might work, like life insurance, if the insured were given credit for previous premium payments. The payments of healthy young people could build up to provide an account that would be used to pay their medical expenses when they became ill. If they ran through their accounts then they might borrow from the insurance company and repay later.

But insurance companies have never credited anyone for payments made during their healthy years. They tell us that these payments are pooled to cover the expense of those of us who become sick. At the same time, when we become ill they raise our payments because we have entered a riskier pool.

To keep with Blissex banking analogy. It is as if, after regular monthly deposits in the bank, we got the right to borrow our own money at market interest rates.

This is a nice business model for health insurers but Wonks Anonymous still believes that it is entirely useless for the rest of us.