n If we are going to buy health care in a free market, then we have to have enough money to pay for it. But health care is expensive and we cannot predict when we are going to be ill. n What makes this worse is that postponing buying health care is often risky. So we face the problems of risk and uncertainty. n The market response to this problem was to develop an insurance market to remove the uncertainty and risk from health care spending. We pay an agreed amount of money per year whether we need health care or not. But then, when we need care, the insurer pays the bills, however large they are.