John C. Goodman: “If the health insurers followed the lead of the casualty insurers, their ads would focus on what could go wrong and how good they are at treating the problems. … But in fact, this is what you never see in a health insurance commercial in Washington, DC. … Instead, what you see are pictures of young healthy families. The implicit message is: if you look like the people in these photos, we want you. What explains the difference between the health insurance and casualty insurance markets? In the latter people pay real prices that reflect real risks. In the former, no one is paying a premium that reflects the expected cost of his care. The healthy are being overcharged so that the sick can be undercharged. So insurers try to attract the healthy and avoid the sick. But the perverse incentives don’t end after enrollment. The incentive then is to under-provide to the sick (to encourage their exodus and avoid attracting more of them) and over-provide to the healthy (to keep the ones they have and attract even more). … There is no reason why the health insurance marketplace cannot work just as well as the market for homeowners insurance and auto liability insurance.”