[twoodfin]

You’d pay the 99% chance of asthma * $5,000 + 1% chance of cancer * $50,000 (or whatever the probability you get cancer * the estimate of cancer treatment costs).

If you do get cancer, the other 99% of folks who didn’t get it are covering your costs.

[ModernMech]

> If you do get cancer, the other 99% of folks who didn’t get it are covering your costs.

This is exactly my point, but it's this mechanism Paul Ryan said wasn't working. @powera claimed this is not the point of insurance. These things seem like exactly the same thing to me, so help me understand the nuance.

[twoodfin]

It’s the asthma for which you are near-guaranteed to need $5,000 worth of treatment for that’s the issue, not the small chance you get cancer.

You’re not looking to insure against the chance you get asthma: You have asthma, and you’re looking for someone healthy to help pay for it. If too few healthy people sign up for Obamacare relative to the sick (and remember, all else equal, they have to be charged the same regardless of their health) those healthy folks will get an increasingly bad deal as their premiums are covering the costs of more and more sick enrollees and more and more healthy folk drop out of the exchanges. That’s the “death spiral”.

[pjdemers]

The probability of getting cancer over a lifetime is more like 40%. https://www.cancer.gov/about-cancer/understanding/statistics Some people with cancer die quickly, but most live with it for years of expensive treatments.