This is called insurance. Historically some deeply religious groups were opposed to insurance, because they felt it was gambling.
> he average cost by forcing everyone to get insured is less because you're forcing some people to buy plans for whom it's not worth it.
It's really a timeframe question. A 20 year old, generally, needs less care than a 50 year old, who needs less care than an 80 year old. one approach is to provide lifetime care, and hope that technology improves (as it has for all of human history) and assert that care today for an 80 year old will be less expensive in 10 years than it is today.
Now, of course, actual payments for health care is more expensive year to year, because, as you say, adverse selection.
In any case, as you point out adverse selection (the problem of information asymmetry) means the payer must be as knowledgeable as the payee. An obvious solution (but maybe not the best solution) is something like medicare.
I'm not sure i understand what you're advocating. Perhaps you mean each person should set aside some portion of their cash for whatever expenses they might have, and the odd 20 year old with leukemia should take on a few hundred thousand dollars of debt. of course if you're unlucky enough to have one of those 10% survival variations, the cost will of course be multiplied out by 10.
The average american only makes about $2,000,000 over their lives, and they have to eat and have a place to live and stuff, and only half will beat the average, what sort of return could an actual care provider expect? perhaps $200,000? So your model becomes pretty clear, if cost to treat @ 18 > $200,000, the person shouldn't be treated. That number will change with education, but of course decline with age.
Seems like not a good solution, but i see where you're coming from.