A disussion about health insurance invariably brings up a comparison with auto insurance which is required by law.
The primary difference between auto and health insurance is that auto insurance is for a liability that one incurs when driving a vehicle. Health insurance pays for personal consumption.
Being involved in an accident automatically involves the legal system. If I ran you down in the crosswalk and you suffer a broken leg; there would be a legal claim to determine your compensation.
You and I will have different ideas about just compensation for a broken leg. I think you'd heal up well if you put your leg on a pillow with an ice pack. You are likely to want a doctor's visit, and might throw extra costs in the mix just for spite.
The legal liability (not the risk) is the driving force behind the requirement of auto insurance.
Auto accidents, by their nature, involve courts.
Health insurance is a means for funding personal consumption. When one buys health insurance, one invites the legal system into personal health insurance. Health insurance works as follows: a person buys into a group pool. In times of need, the policyholder places a claim against the pool. An insurance claim is a legal action defined by the courts.
The big difference between health and auto insurance is that health insurance invites the courts into decisions about personal consumption. Auto insurance, on the other hand, covers liabilities in which courts are already involved.
There are some aspects of health insurance that involve liability. For example, workers' comp covers liabilities of an employer. If you suffer an injury during work, that injury is the legal responsibility of your employer. A restaurant that serves unsafe food is liable for food poisoning. A toy manufacturer is responsible for product liability, etc..
The difference between standard liability insurance for an automobile and health insurance is that liability insurance, by its nature, involves the legal system. Health insurance invites the court system into questions about personal consumption.
As I do not want court involvement in my health care, I have been working on developing a viable alternative to insurance.
Insurance is the proper way to fund liabilities that involve third parties and the courts. The system fails with personal consumption because it invites the courts and government into regulating personal consumption.