Krugman on insurance

Krugman answered questions recently for the New Yorker. Some of the answers were so well put.

example 1:

QUESTION FROM ERIK DONNELLA: Why should (or shouldn’t) health insurance be for profit?

PAUL KRUGMAN: I think at a fundamental level the point is that what we want is broad coverage—it’s a widely shared social goal—but that’s not what private insurers are trying to achieve; from their point of view profits are maximized by not covering those who need it most. Long ago we made the decision that seniors should have guaranteed coverage via Medicare; there’s no real reason to apply different logic to those under 65.

After reading this, I was all "right on!" "how could anyone not agree with this logic?" But then I saw the flaw...If private insurance is that bad, why do we use it for our homes, possessions, our trips, dental, rental cars...

I guess my answer is that I don't. The only insurance I buy is what is mandated by law.

Example 2:

QUESTION FROM NATE: .... how am I to make sense of the constant alarm about USA’s credit rating being raised in the news?

PAUL KRUGMAN: ...for now I would disregard the deficit hawks...

...I’m especially baffled by the idea of taking insurance against a U.S. default. If America defaults, we’re talking about a chaotic world—Mad Max, more or less—in which case, who imagines that insurance claims will be honored?