Want to Spur Innovation in Healthcare: Free It!

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For example, because ObamaCare regulations have outlawed insurance as we know it, forbidding insurers from accounting for health differences and thus risk, the law and its rules effectively punish insurers that offer coverage for certain very expensive conditions.

Sure, the insurance companies cannot deny one with such an expensive pre-existing condition a policy, but, compelled by cost considerations, they can “either leave the market, as many have, or slash their coverage.” This is just one of many examples of incentive problems created by a shortsighted law that, however well-intentioned, will end up hurting those segments of the population it is intended to help.

History hints at a world of potential. The decades enveloping the turn of the century were the golden age of fraternal lodge practice, an innovative ground-up answer to a problem facing working people, a voluntary solution produced by civil society on its own.

As historian David Beito teaches, by 1920, “at least three out of every ten adult males” were dues-paying members of fraternal orders and thus entitled to certain benefits in times of sickness and need. Such societies anteceded the modern welfare state; they were a way to spread — indeed socialize — risk without compulsion or coercion.


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