Health Insurance Industry Regulation/Competition

[idirtify]

I got into an argument and was not prepared for my opponent’s basis for his position against capitalism and for government health care/insurance. He blamed the need for gov intervention on the universally-high premiums for health insurance. He acknowledged that the high cost of health care is due to the government’s over-regulation of the industry, but challenged me to explain the analogous over-regulation of the health insurance industry that allows it keep its premiums high. Since I am not familiar with said regulations that may serve to help keep premiums high, I am asking. What regulations keep small business from entering the health-insurance industry to provide the competition necessary for keeping premiums low? I assume it is due to over-regulation, but I’m not familiar with what kind of regulation that would be or where to learn about it. My opponent claimed that since health-insurance company profits were sky-high, the government must provide the competition. I figured there are many educated folks on this fine forum that could provide good answers; I just hope I’m not asking a stupid question about old material. Thanks.

[Epic]

I got into an argument and was not prepared for my opponent’s basis for his position against capitalism and for government health care/insurance. He blamed the need for gov intervention on the universally-high premiums for health insurance. He acknowledged that the high cost of health care is due to the government’s over-regulation of the industry, but challenged me to explain the analogous over-regulation of the health insurance industry that allows it keep its premiums high. Since I am not familiar with said regulations that may serve to help keep premiums high, I am asking. What regulations keep small business from entering the health-insurance industry to provide the competition necessary for keeping premiums low? I assume it is due to over-regulation, but I’m not familiar with what kind of regulation that would be or where to learn about it. My opponent claimed that since health-insurance company profits were sky-high, the government must provide the competition. I figured there are many educated folks on this fine forum that could provide good answers; I just hope I’m not asking a stupid question about old material. Thanks.

1. People are not allowed to purchase insurance across state lines.
2. Each state has issued a litany of insurance mandates, which means that every insurance contract sold must cover breast augmention, in vitro fertilization, viagra, sex change, hair transplant, just the craziest shit you can imagine.

Due to economic law, when the government fixes product (as in the insurance industry) then price is fixed too based on market factors. Likewise, when the government fixes price (is in medicare), then product is fixed based on market factors. For either to fluctuate, you must have a free market.

YouTube - State Mandates for Health Insurance: I'm Paying for WHAT!? (http://www.youtube.com/watch?v=2voEabQyQtA&eurl=http://www.youtube.com/user/BreakTheMatrix&feature=player_profilepage)

Rand Paul used Kentucky as an example - before state insurance regulations, there were 37 insurance companies. After serious regulations and insurance mandates, only 2 remained. Those companies were then able to raise rates significantly and get away with it, because customers (customers = employers, because insurance is mostly employer based, thanks to government) only had one other option.

[idirtify]

Thanks for the information and video. It worked.

I’m surprised this topic is not more popular. It seems critical to the discussions about health care reform. Have I missed other threads about it?

[Zippyjuan]

The idea of insurance is to give people access to health care but the plan includes nothing to try to help contain the costs which is why it is presently unaffordable to so many people. Guaranteeing to pay for everything is a guarantee for even worse cost escolation. This makes the problem worse- not better.