> "That isn't how insurance works. To do an insurance pool, you have to have a lot of people, knowing that you won't be paying out to most of them. Otherwise, it is not insurance, but some sort of group savings/pay as you go."
Seriously, not only this is clearly not how it works, but it actually makes zero economic sense, it doesn't work like that at all.
Insurance companies have people there calculating the expected costs with the different groups and - whenever legal - they DO DISCRIMINATE amongst them. Why do you think woman pay less for life insurance than men? Or why do woman pay less than men for car insurance? According to your rational that shouldn't be the case, you should just put them all together and everyone would pay less.
Let's just reduce this at absurdum for you to get it.
You have a group of 100 people. 50 completely healthy according to a medical check-up, 50 with HIV needing constant medication: Now, where do you think the health insurance premium would be lower for the 50 healthy ones:
1 - If we charged all the 100 people the same?
2 - If we divided the group and charged the 50 people with HIV differently than the 50 healthy people?
Answer this question and immediately you will understand why what you are claiming is wrong.