Policyholders would have no reason to pay to have insurance cover things that would be cheaper if paid for directly - or not paid for at all in the case of things that are not a real concern to many people, such as baldness cures.
One of the factors in the number of the "uninsured," for whom politicians are willing to turn the whole medical care system upside down, is the high cost of insurance that covers far more things than most people would be willing to pay for if it were up to them.
Too many political "solutions" are solutions to problems created by previous political "solutions" - and will be followed by new problems created by their current "solutions."
There is no free lunch. In the case of health insurance, there is not even an inexpensive lunch.
Health insurance would be a lot less expensive if it covered only the kinds of risks that can involve heavy costs, such as a major operation or a crippling disability.
While such things can be individually very expensive, they don't happen to everybody, and insurance is one way to spread the risks so that the protection of a given individual is not prohibitively expensive.
The problem of "pre-existing conditions" is a problem largely because of the way that politicians have written the laws - more specifically, by giving a tax break to employer-provided health insurance.
If individuals bought their own health insurance, with the same tax advantages, the fact that an illness occurred after they changed employers would not make it a "pre-existing condition."
There is no inherent reason for employers to be involved in the first place.
The fact that some guy manufactures furniture or plumbing fixtures in no way qualifies him to understand insurance for his employees. Including him in the loop adds another unnecessary layer of bureaucratic costs.
Political risks are the biggest risks.