misconceptions and deregulation

Just very briefly – “deregulation” does not mean the stripping away of all rules or the desire to enter into a state of anarchy.  So when I speak of “deregulating” the health care industry, I’m mainly talking about removing rules that prevent competition and create monopoly or that are expensive but provide no real benefit.  So removing restrictions which prevent insurers from competing force insurers to compete is a way to “deregulate.”  Other regulations which keep insurers from ripping people off, or remove barriers which prevent people from even purchasing insurance to begin with make much more sense.  Regulation should increase choice not decrease it, though ironically it is much easier to write rules that limit choice than to write rules that help increase it.

We’re not speaking in black and white here – or at least I’m not.  Some libertarians or anarchists would probably take a very different view than me.

The way I see it, you can follow a guiding philosophy only so far as it is practical to implement.

So you take the concept of market solutions to its practical limit – and this is hemmed in by historical realities, political realities, the electorate, etc – and then you make a compromise that can also be practically implemented. Give consumers choice over who they pick to provide their own health care via the aforementioned deregulation.  Kill the monopolies and create a real competitive market for health insurance.  Then give consumers even more choice by offering means-tested vouchers, whether or not there is a public option, so that all across the board people can make decisions about their own health care.  Spur competition.

Then you have to start making compromises because of all the basic facts that are impeding a real market from taking off (entrenchment of current industry players, high cost of premiums and the distortion created by decades of employer-provided insurance and so forth).  Write smart, simple regulations that prevent insurers from denying coverage.  Offset this by mandating that Americans purchase or acquire health insurance, and set rules for the “basic” plan that all insurers have to offer.  It’s not perfect, but in the real world, no compromise ever will be.  Imperfection is the nature of compromise, and the unintended consequence of imperfection can sometimes be really good results.

In the end this all comes back to the difference between “small” and “limited” government – or the scope of government involvement vs merely its size, and to the ways in which government does intervene into both our lives and, somewhat redundantly, into our economy.