"just like there is a public insurance system, and then there is a government catch all for those who are otherwise uninsurable. that makes sense because the public sector does what it does. the government provides the safety net. and they deploy the safety net using a similar paradigm, to better manage the risk."
That model itself is questionable. "Public insurance system" has been a part of life only for 70+ years, and it's already proven to be a check-kiting system. Compared to that, the private safety-net (called "charity") has been in existence for several thousand years now. Throughout human history, private charity is the predominant means through which the weaker members of the society are taken care of. Every once in a while, usually at the peak of a prosperous time, the idea catches hold that it is feasible for the legalized robbers/mafia to provide a safety-net for all. What follows shortly afterwards is usually financial bankruptcy, moral decay and the fall of civilization.
