Though the set of ~5 seems to expose you to a lot of risk still. What if the size of the set were increased such that the risk was 1 in a million rather than 1 in five.
What if the set of those insured was almost the size of a population?
Not only would you have spread the risk greatly and reduced cost, but you'd probably benefit from collective bargaining power to be able to reduce the costs that you were exposed to.
In the limit, I think you might reach the Affordable Care Act: a single risk pool for each region, and price variations only on age and smoking status.
Though the set of ~5 seems to expose you to a lot of risk still. What if the size of the set were increased such that the risk was 1 in a million rather than 1 in five.
What if the set of those insured was almost the size of a population?
Not only would you have spread the risk greatly and reduced cost, but you'd probably benefit from collective bargaining power to be able to reduce the costs that you were exposed to.
Sounds like a good idea all round.