Watching this fight over health care / insurance reform has made me sad. I feel like I am watching my house burn down, while the Democrats who have the water hose are maddeningly watering the lawn to put out the fire, while the Republicans are struggling to get the hose away from them. Unfortunately, I have low confidence that once the Replublicans get the hose they would indeed save the house. I wouldn't be supprised if they started spraying the fence.

Everyone is chanting, “STOP insurance companies from denying people with pre-existing conditions!” Here is a classic example of Stage One Thinking that is so common these days. We get an idea that sounds nice and start preaching it as the answer and never take the time to think through, what happens next? Well, if you are healthy and no insurance company can deny you coverage once you get sick, when are you going to get insurance? Obviously, you will get insurance when you get sick and need it. No one will get insurance when they are healthy, why would they. If you could get car insurance after your accident and the insurance would have to cover the cost of the repairs, what sane person would get car insurance before the crash? No one.

Some say the answer to that problem is a “National Mandate.” The government mandates that everyone must buy health insurance. There are problems with as well. The two main problems are first, it’s unconstitutional. The government does not have the authority to FORCE me to buy a product simply because I am alive. Wait, they make me buy car insurance how is that different? That is different because they are attaching that mandate to the privilege of driving a car on government provided streets. If you don’t want to drive a car then you don’t have to get insurance. With healthcare they are dictating that I must purchase something simply because I exist. That is unconstitutional, they have a lot of power, but not that much power. The second problem with this idea is that the government would have to ‘approve’ certain plans to indicate if they satisfy the mandate. If I want a plan that has a higher deductible, or doesn’t cover child immunizations, I don’t get that choice if the government says the plans have to be structured a specific way. And they will have to set minimum plan guidance.

The answer is to allow the free market to create a vast array of plans that individuals can chose from, some BMW plans and some Chevy plans. Get the employer based group discount systems out of the equation because they distort the market for the individual. If there is a wide assortment of insurance plan to pick from, and many are less expensive plans that only cover catastrophic health issues then most people will buy insurance. Those that don’t get insurance and there always will be some, will still go to the hospital and get help and we garnish their wages until they repay, but this I believe would be a small minority.