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1998 U. Ill. L. Rev. 757 (1998)
Public Choice and Private Insurance: The Case of Small Group Market Reforms

handle is hein.journals/unilllr1998 and id is 767 raw text is: PUBLIC CHOICE AND PRIVATE INSURANCE: THE CASE OF SMALL GROUP MARKET REFORMS Mark A. Hall* In this response to Professor Richard Epstein's book Mortal Peril, Professor Hall argues that health care is a partial public good which invites limited governmental intervention and some el- ements of social insurance. He therefore takes issue with Professor Epstein's opposition to small group market reforms. Such reforms include guaranteed issue, limits on preexisting condition exclu- sions, and affordability provisions. Professor Hall argues that small group market reforms help to preserve a private insurance market as well as a voluntary insurance purchase system. He agrees with Professor Epstein that such reforms create cross-subsi- dies and alter how insurers compete, but Professor Hall argues that these effects have market advantages. Although Professor Hall further agrees with Professor Epstein that some reforms create market distortions, Professor Hall has found from his empirical studies that small market reforms work reasonably well. I. INTRODUCTION A. Epstein's Simple World I grew up in Tennessee, where it is joked that the main crop is rusty cars. Outside the cities, every third yard has an automobile or two sitting up on concrete blocks. My own yard was one of the worst offenders. I grew up fixing my own cars and taking parts from my brothers' junk heaps when I needed them. Back then, of course, you could still work on your own car. V-8 and slant-6 engines had their names because you could actually see the shape of engines. They con- sisted of simply these basics: the engine, the carburetor, the distribu- tor, the timing gear, the radiator and water pump, and the ignition/ battery/generator. If anything went wrong, it pretty much had to be one of these six simple components. Cars were not cluttered with ex- haust control devices and various computerized elements that require engineering degrees to identify, let alone service. I was able to do * Professor of Law and Public Health, Wake Forest University; Visiting Professor, Univer- sity of Pennsylvania Law School. B.A. 1977, Middle Tennessee State University; J.D. 1981, Uni- versity of Chicago.

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