A CATO policy paper on how "health-status insurance" could be the free-market fix for the health care industry we're looking for:
http://cato.org/pub_display.php?pub_id=9986
This is very well written, and makes complete sense to me. The idea is to decouple short-term "health insurance" (that is, the premium you pay to cover this year's health insurance) from "health-status insurance" (which would cover the increased health insurance premiums you would have to pay if your medical situation worsens).
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