Competition and Insurance

I think the points Kevin Drum is making here start out in a good place but wind up heading in the wrong direction. The salient fact about competition and health insurance isn't that one can't imagine policies that would create a more effectively competitive insurance market, the problem is simply that decent people think the results of such a market would be undesirable.

Under competitive conditions, companies get better at what they do. Normally, that's good. Electronics companies make gadgets that people want, at a cost cheap enough for them to afford them. Restaurants offer tasty food, enjoyable ambiance, efficient service, etc. But what well-functioning insurance companies do is assess risk accurately. And the general premise of health care policies in most countries is that health care should be delivered to people who need health care. This is just fundamentally incompatible with well-functioning insurance companies playing a large role in the financing of health care.