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14 Conn. Ins. L.J. 307 (2007-2008)
Health Insurance: Market Failure or Government Failure

handle is hein.journals/conilj14 and id is 311 raw text is: HEALTH INSURANCE: MARKET FAILURE OR GOVERNMENT FAILURE? David A. Hyman' A society that does things that are inefficient or perverse in their effects ought to be told so.2 I. INTRODUCTION Health insurance is once again on the policy agenda, and it is ddja vu all over again. There are the same troubling statistics -- 47 million Americans are uninsured, and 20 million Americans are under-insured (whatever that means).3 There are the same anecdotes about the tragic consequences of being uninsured. There are reports by government agencies, think tanks, and do-gooder organizations. There are the same policy entrepreneurs, pushing old wine in new (and not so new) bottles. There are the same appeals to social solidarity, self-interest, or both. The interest groups are back in force as well -- each seeking to protect and advance their own interests, while asserting their deep and abiding concern for the broader public interest.4 Reform proposals are being pushed by all the usual suspects, including local, state and federal legislators, and all of the presidential candidates. The reform proposals vary in their specificity, but all (either implicitly or explicitly) identify the source of the problem as market failure - and promise new regulations and more taxes to fix the problem. This article follows a different approach, and makes the case that government failure should occupy center-stage in understanding how things came to look the way they do. Rather than market failure, it is our inefficient and perverse 1. Richard & Marie Corman Professor of Law and Professor of Medicine, University of Illinois. 2. GEORGE STIGLER, Are Economists Good People?, in MEMOIRS OF AN UNREGULATED ECONOMIST 6 (University of Chicago Press 2003) (1988). 3. U.S. CENSUS BUREAU, INCOME, POVERTY, AND HEALTH INSURANCE COVERAGE IN THE UNITED STATES: 2006 (2007). The claim that someone is underinsured is rhetorically appealing, but essentially meaningless, absent some shared understanding of adequate coverage. Efforts to define adequate coverage typically result in the determination that everyone should have gold-plated coverage. That is exactly what everyone would have if cost were no object. It isn't. 4. Strictly speaking, they never left.

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