Sunday, February 14, 2010

Curbing Evil Insurance Companies

Insurance companies are pilloried daily by the politicians. The charge is that they make too much money and they don't provide good insurance policies. Imagine you heard of a company doing that in some other industry? Take the computer industry. Suppose you saw a computer company that charged too much for their computers, made way too much money, and provided badly designed computers. What would the solution to this problem be? Government?

Hardly. Instead, the forces of competition would drive the computer company with an expensive, but poorly conceived product, out of business. In fact, that is precisely what has happened as prices of computers have come down consistently over the past twenty years as their quality has dramatically improved. Competition does the trick. The same is true of the insurance industry. If you want better health insurance products, then get government out of the way. Eliminate cumbersome state regulations and rules that prohibit interstate purchase of insurance. Get rid of all federal rules pertaining to insurance contracts. Let the market provide the product, subject only to truth in advertising.

The idea that government can provide anything efficiently is so absurd that it suggests an unfamiliarity with government's present activities. From medicare to public education, the record is clear -- the government is the most inefficient provider that one can imagine. Get government out of the way and let the free market provide products with minimal government role.

No comments: