Of course the kinds of mini-med policies you wrote about are approved by insurance regulators, whose job is supposed to be consumer protection. The system doesn’t work very well.

You are correct — if you’re going to have guarantee issue, you also have to have an individual mandate. Otherwise the system doesn’t work.

One can reasonably ask whether guarantee issue is the right solution to the problem in the first place….

Evan

You are right about guarantee issue driving up the cost of insurance, but why didn’t you mention the inseparable corollary: that this is exactly why we have to have an individual mandate if we want health reform to work?

Of course, no one would want to buy a policy like that!

The trouble is that the insurance regulatory system in the United States is archaic and bad for consumers. We have 50 state regulators and each one sets its own rules as to the content of insurance policies.

One of the promising things about the reform law is that the exchanges it sets up will have a national scope. Unfortunately, it seems as if the federal government is planning to regulate policies sold on the exchanges in the same way that the states do now. That’s not really progress.

It’s ironic because you would think that America is the home of free market capitalism, but it’s not so in insurance. In other developed countries, like Canada, the government takes a different approach to insurance regulation that allows for far more innovation, competition and creativity.

Evan

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