By Neil the Ethical Werewolf One reason why it costs so much to buy health insurance as a individual is because of a problem that economists call “adverse selection.” Adverse selection occurs when people on one side of a market have better information than people on the other side. Then the people with less information start doing things that keep almost anyone from getting a good deal. It's an interesting problem, and the rest of this post is devoted to explaining how it works and how to beat it. Suppose we’re all 25-year-olds who want to buy some health insurance. Then suppose the insurance company sees that average health care costs in America for people at our age come to a total of $1000 per year*, and decides to charge each of us $1000 for a year’s insurance. What do you think is going to happen?
