Right but you'll quickly see that analogy doesn't work in another way. With car insurance, its possible I can pay into it my entire life and NEVER have an accident (my current trajectory). I deserve a lower rate!

With health insurance, you are 100% guaranteed to become sick and die, at some point. So the options are either, everyone pays in and it covers everyone, or it only covers a small subset of issues, and everyone gets dropped when they get really sick (the prior state). The latter is definitely cheaper, because its cheaper to let people die / let them suffer than it is to keep them alive / healthy. That is effectively the choice to make.

Healthcare costs will grow without bound near the end. Your model only works if everyone choses every treatment available in the end which is just dumb because the outcome is the same.

It's appropriate for premia to be very high for geriatrics. The appropriate response is to chose when you're done not to crush younger workers so you can sit in a hospital bed for an extra month.

Also an exponential distribution is still a probability distribution you can trade volatility on.