Why Does Health Insurance Cost So Much? 
Because insurance primarily deals with `` pure risk '' , the chance of loss but not the chance for gain . The most effective way for a insurer toeffectivelymanage their own costs and to pay out on claims while still being profitable is through `` risk pooling '' which is the practice of grouping a large number ofhomogeneousand independent risks . By risk pooling those who subject the insurer to excessive claims should be off set by the policy holders who under use their policies . However the current market is notbalanced . . one of the goals of PPACA , therefore the majority of individuals who areseekinghealth coverage are the ones who are going to be mostlikelyto incur expensive claims . There are several other factors such as hospitals , when they extend charity care to poverty stricken individuals who need treatment they are forced to reconcile their budgets by charging more to the individuals who have the means to pay ... another area that PPACA aims to address . 