OK, that can certainly be done. It might even work out better for more than 50% of Americans than the current system, because it would almost certainly reduce the amount of subsidization going from the healthy to the sick.

Tell me how you do individual policies without either:

1. Government regulates insurers to require them to accept all comers, minimum coverage standards, etc. Basically, govt enforces wealth transfers through the insurers.

2. Government shells out a crap load of money to the sick, more than they do now -- and a growing crapload because in an individual market case insurers will have even more incentive to not write policies and push people into the govt system unless they're a 25 year old with good genes. In the current system, they can't, because they're required to treat employee pools as undividable groups

3. People with cancer, juvenille diabetes, stroke/heart attack survivors, etc. are totally and completely screwed.

A private automobile insurance market works because we are actually willing to say that someone who is too poor or too high risk just doesn't get to drive. Even then we have mandatory coverage laws in part because of the need to insure against people who ignore the rules and drive w/o insurance anyway (i.e., to subsidize those drivers, even if we'd rather not).

If you aren't willing to make the same call for people people whose income / health risk nubmers don't balance, you inevitably get govt involvement.