Consider an individual whose utility function over income $I$ is $U(I)$, where $U$ is
increasing smoothly in $I$ and is concave (in other words, our basic assumptions
throughout this chapter). Let $I_s = 0$ be this person's income if he is sick, let $I_H > 0$
be his income if he is healthy, let $p$ be his probability of being sick, let $E[I]$ be expected
income, and let $E[U]$ be his expected utility when he has no insurance.