Default risk was priced and risk was conserved!
Fast-forward to the present day, the insurance concept was applied to healthcare as a way to smooth out one's healthcare costs over a lifetime and eliminate tail-risk to the individual. Since the 1930s, the insurance industry has evolved into a system to avoid paying for your healthcare costs. First, the growing expenses were thrown onto the employer (think auto manufacturers) and when the employers can't support the cost, onto the healthy by passing cost increases on to employees through increased premiums.
The fact is that if you consume something, you or someone(s) else will have to fund your consumption. The second law of thermodynamics applies to healthcare as well. There is no free lunch here either.
Insurance companies end up as an additional layer of administration expense. In the case of financialization of health care, the administration is extraordinarily expensive!
Risk is conserved!
