The Broken State of American Health Insurance Prior to the Affordable Care Act

(download the full report)

  • The health insurance system in America is plagued with problems, such as continually rising premiums and the difficulty of finding coverage. The Obama administration’s diagnosis of the situation was clear: health insurance companies have too much freedom. The solution, therefore, is for the government to restrict this freedom, through provisions of the Patient Protection and Affordable Care Act (ACA).
  • Many in America accept President Obama’s diagnosis and solution because they assume that the health insurance industry pre-ACA was an essentially free industry. This paper challenges that assumption.
  • A survey of some of the major controls pre-ACA reveals that health insurance was already one of the most government-controlled industries in America. This is the context in which we must assess the causes of our problems in health insurance.
  • Contrary to proponents of further intervention, evidence presented in this paper suggests that government regulation plays a major role in the poor state of health insurance today. We must be willing to entertain the possibility that our diagnosis is mistaken: the patient’s illness stems not from too much freedom but from too many controls.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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