Arnold Kling has a great column, titled You Call This Health Insurance?, at TCS. He argues that a real health insurance scheme will allow sharing (or pooling) the risk of rare medical events (such as heart attack, major illness, etc. in people under age of 45) among the insured. And occurance of such a rare medical event will trigger a large one-time payment to cover (a major share) the entire expected lifetime costs to take care of that disease. The almost sure medical events, such as heart attacks among those over age of 55, should be covered through one's savings. The current system is simply a "split the check" or "pass the buck" system in which few people benefit at the expense of others. There is an in-built incentive to over-use the system as expenses for even everyday medical illnesses are reimbursed. That's reason why the current schemes benefit the providers as they see an increased demand for their services and products.
See also his blog for an excellent analysis and discussion on the same topic.