Tuesday, December 16, 2008

New Insurance Option

Amidst the gloomy news of some insurance industry lobbyists supporting yet more government controls of health insurance, there are occasional bits of good news.

One is the concept of being able to purchase an option now to be able to buy future insurance in the event of a future illness, offered by United Health Care in some states.

This sort of innovative insurance product is precisely the sort of creative offering one would expect in a free market. There is a need (consumers' concerns about being able to be insured in the future) and a potential for profitable service (an option that insurers can sell), making it possible for a mutually beneficial exchange.

If current government restrictions on insurers (such as guaranteed issue, community rating, and guaranteed renewability) were lifted, insurers and patients would be free to negotiate even more financial and contractual innovations such as this one -- to the tremendous benefit of us all.

Americans already know the benefits of our current semi-free market in other sectors of the economy, with massive innovations in computers, cell phones, food, clothing, and other consumer goods. This can and should be the norm for health insurance as well.