I'm about six-months out from needing my own health care insurance and I keep thinking about how crazy it is that we rely on a job for this. 

For companies, it's a great strategy. They get to offset lower wages by providing healthcare benefits, while still having their workers pay part of the cost. But looking at today's job market—where people switch or lose jobs constantly—tying our well-being to our employment feels like a terrible idea.

This reliance didn't come out of nowhere, of course. It is significantly cheaper to be a part of an insurance group than to be self-insured. Healthcare—like childcare or emergency services—defies the normal rules of supply and demand because it has almost zero price elasticity. If I don't have diabetes, I won't buy insulin, even if it's free. On the other side, if I need insulin to survive I will pay any price they ask because for me it's life and death. 

That's why being self-insured is so dangerous. When you end up in the hospital, you can't exactly walk away from the negotiation table. You may even be unconscious. There's no way to negotiate as you have to pay to live. The hospital has all the leverage. 

Insurance companies level the playing field by grouping patients together. They use the sheer size of their patient networks to negotiate on our behalf. If a hospital won't lower its prices, the insurance company simply directs its massive cohort of patients elsewhere.

This logic extends to government programs, which is exactly where we could make real inroads on healthcare prices. Currently, government programs mostly cover older demographics. But if we expanded that cohort to include everyone, the government would gain significant leverage to negotiate better prices. We would still need to elect people in government to drive down those prices, but that's the difference between insurance companies and the government. We elect the people running the government. We don't elect those running the insurance companies. By expanding the government cohort, hospitals lose their unilateral pricing power and are instead incentivized to take care of everyone to get those payouts.