Americans carry many different forms of insurance.

There's car insurance, home insurance, life insurance, even pet insurance.

Most of these insurance policies work well and are fairly priced,

but there is one glaring exception, health insurance.

Only health insurance becomes more complicated and more expensive at the same time.

So the obvious question is, why?

To answer this question, we have to start at the beginning.

What is insurance?

It's pretty straightforward.

You pay a monthly fee which provides financial protection against unforeseen,

sometimes catastrophic events.

People buy homeowners insurance, for example, to protect themselves from the financial loss incurred

in the event of a fire, a flood, or theft.

Because millions of people are paying into the insurance pool,

the pool has enough money to cover the unlucky person whose house does burn down.

And since insurance is meant to share risk,

it only stands to reason that higher risk individuals have to pay more to be insured.

Someone who has had two accidents is going to pay more for car insurance

than someone who has never had an accident.

Why?

Because their track record indicates they are more likely to have another accident.

While insurance provides a bulwark against unforeseen loss,

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