As I understand it you are using "no worse off" in a Pareto sense, meaning "no worse off in any way", and I think that is a bad way to look at it. It certainly highlights a difference in the way different people think about this. Some people fixate on reducing the risk of a medical expense disaster and ignore everything else.nisiprius wrote: ↑Wed Nov 29, 2017 12:46 pmIf you have sufficient assets that you can literally say that you have a spare $2 million that you do not need, have not dedicated (even mentally) to some other purpose, can earmark for medical costs (and not double-count by also earmarking it for another purpose), and can take it philosophically if your medical costs spend it down to zero, then it seems to me that you would be no worse off without health insurance, compared to a family without substantial assets, insured by a policy with a $1 million cap.
There are a large number of low probability calamities. Having an extra $100,000 laying around mitigates a great many of them. So "Fred" with no medical insurance but $100,000 to deal with an arbitrary problem may be at lower overall risk than "Barney" with no money but $1,000,000 medical coverage. Even though Fred is clearly worse off in the case of a $500,000 illness. Now $100,000 might be the wrong number, but it is clearly less than the $2,000,000 you suggest earmarking solely for medical expenses. Even if you had the $2M you should not dedicate it to medical expenses. It would be sub-optimum to die with $2M in a medical fund because you couldn't otherwise afford a bus ticket out of a war zone.