Why health insurance companies are bad

You often hear animosity for insurance companies from the Left.  That is, those who want more government control of medical insurance. Yet, those who want less government should advocate repealing laws that coddle insurance companies at the expense of patients. As I wrote last week, insurance companies could gain so much credibility when arguing against more political controls on them by admitting how existing controls help them.

Tim Carney has an excellent article about how insurance companies benefit from existing regulations at patients’ expense, and have the nerve to push for more. It begins:

Dear conservatives: Health insurance companies are not your friends. Keep opposing a new government-run insurer, a single-payer plan, and new regulations on the HMOs. But grant that Speaker of the House Nancy Pelosi is correct on this: Insurance companies are villains.

Insurance companies lobby for big-government regulations, subsidies, mandates, and tax-code distortions that funnel them money, keep out competition, and stultify innovation. These policies preserve the employer-based health-care system that mocks the idea of free-market competition. Then they cry “unfair competition” when government threatens to encroach on their government-protected monopolies.

But they’re not just lobbying against a government option. Today, health insurers are lobbying to force you and me to buy their product or face a tax hike (the individual mandate).

Read the whole article, entitled, Down with the health insurers.

(via Michael Cannon’s blog posts at Cato)



Filed under insurance, tax code, HSAs

4 responses to “Why health insurance companies are bad

  1. I agree with this whole heartedly. As a former insurance agent, I saw all the bad things that go on in the business. read my article (attached for the details)

  2. I agree with this whole heartedly. As a former insurance agent, I saw all the bad things that go on in the business. read my article (attached for the details)

  3. I want to thank you for your website. I’ve learned quite a bit starting with health status insurance. I’ve had to defend that due to several people objecting and your site and CATO have been quite helpful.

  4. judi

    The current system has made insurance and health care unaffordable for my family. We have no choice but to enroll our children in medicaid (my husband and I aren’t eligible so we just hope we don’t get sick). The current system also means that we’re in a low wage trap. If my husband grows his business too big we’ll have what amounts to a drop in income. A true free market system would make it easier for us to provide health care for our own family instead of depending on gov’t assistance to pay for it. This article does a great job of explaining why our current system’s flaws aren’t a result of a free market but instead are the results of gov’t regulation mucking up the market.

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