Monday, September 10, 2012

Pre-Existing Conditions and Free Markets

The Atlantic describes, "Why Pre-Existing Conditions Are a Tough Issue for the GOP".

Their analysis is correct in noting that Republicans feel obliged to "me too" the Democrats in advocating that the government compel insurance companies to cover customers regardless of any pre-existing conditions.

However, they are wrong in presuming that free markets can't address this issue. In fact, there are excellent free-market proposals that would tackle this issue, such as "health status insurance" proposed by University of Chicago professor John Cochrane.

We can't fix problems caused by earlier government controls with yet more controls.  Instead, we must repeal the earlier bad laws and allow the free market to operate properly.

For more detailed discussion on free markets and pre-existing conditions, see my article from the Fall 2009 issue of The Objective Standard, "How the Freedom to Contract Protects Insurability".