EXCERPT:
"If medical insurance simply covered risks-- which is what insurance is all about-- that would be far less expensive than covering completely predictable things like annual checkups. Far more people could afford medical insurance, thereby reducing the ranks of the uninsured.
But all the political incentives are for politicians to create mandates forcing insurance companies to cover an ever increasing range of treatments, and thereby forcing those who buy insurance to pay ever higher premiums to cover the costs of these mandates.
That way, politicians can play Santa Claus and make insurance companies play Scrooge. It is great political theater. Politicians who are pushing for a government-controlled medical care system say that it will "keep insurance companies honest." The very idea of politicians keeping other people honest ought to tell us what a farce this is. But if we keep buying it, they will keep selling it.
One of the ways of reducing the costs of medical insurance would be to pass federal legislation putting an end to state regulation of insurance companies. That would instantly eliminate thousands of state mandates, which force insurance to cover everything from wigs to marriage counseling, depending on which special interests are influential in which states.
It would also promote nationwide competition among insurance companies-- and competition keeps prices down better than politicians will. Moreover, competition can bring down the costs behind the prices, in part by forcing less efficient insurance companies out of business.
