Healthcare, psychics, and money

So this is kind of a political issue as well as a money one. To be straight up, I fall on the side of universal healthcare, largely for social reasons. However, I want to delve into what I see as the money side of this, both on a personal and societal scale.

To start off, health insurance is basically a gamble, will I spend more in premiums+copays, or straight out of pocket costs? Now this wager has many different factors, for instance, group rates, how old are you, are you getting an individual or employer sponsored plan, etc, etc.

Let me lay down how I see the base case. First assume there's only one provider, and that everyone is a perfectly rational psychic (can see the furture perfectly). Also assume that each person only gets exactly one chance to either join the insurance plan or not. Now being perfectly rational, and knowing the future, each psychic can calculate how much they'll need to spend for healthcare for their lives, thus if their insurance premium would cost less, than that amount, they'll join. But wait, the insurance company needs to make money (or break even at the very least), so since only the sickest people are joining, they'll need to raise their average rate to compensate for this. This causes the next most healthiest group to drop out, since their cost calculations no longer make sense to stay on the plan. Again forcing the insurance company to raise rates etc,etc.

Now clearly people aren't psycics and not everyone is perfectly rational (not to mention different risk tolerances). But the underlying distinction between healthcare and say fire or flood insurance is that everyone is likely to need some amount each year. Furthermore, given time everyone is going to need a payout (whether it's small like your yearly checkup, or one of the many procedures and older person is likely to undergo). Furthermore with advances in medicine we're more and more able to predict what problems someone will have (genetic risks, early detection of defects, etc)

So in the real world, if you're young and healthy there is every incentive to have no or a very minimal plan, beacuse it saves you money. But on a societal scale, we need the healthy people buying into the health insurance because their lower use will offset the higher use of the elderly and sicker population. But as soon as a significant proportion of healthy people see what makes financial sense, we see the same cycle of rising premiums and exodus of healthy people.

So to me the only real long term solution is healthcare as an all or nothing deal. Either require everyone to have it, whether through the government (ala medicare) or private insurers. Or it will get done away with altogether as no one is willing to pay the prices for it.

The reason I think our system holds and has held is due to social inertia. Basically with employer sponsored healthcare, most of the real costs are hidden from us, thus greatly skewing each person's calculation (For instance I pay $750 a year for my healthcare, but my company pays over $3k as well, so I'd likely see the cost as $750, not $3750. But it is, because that $3k could otherwise go to my salary). Also the living paycheck to paycheck situation (or even in debt) prevents many from being able to comfortably take the risk of using a high deductible, or no plan at all.