# Start Here > Guest Forum >  What are some specific examples of government regulation that increase health insurance costs?

## Boshembechle

I don't doubt that there are some government policies out there that distort the insurance market. Can one of you guys please provide some specific regulations/laws/policies that result in higher costs for the average consumer in the health insurance market? Please do not say medicare or medicaid, as I am aware that these already drive costs up.

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## ctiger2

There are currently Federal Government regulations that prevent insurance companies from competing across state lines. 

Get rid of that and *Insurance* prices come *DOWN*.

The current health insurance system is a fascist monopolistic one.

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## oyarde

> There are currently Federal Government regulations that prevent insurance companies from competing across state lines. 
> 
> Get rid of that and *Insurance* prices come *DOWN*.
> 
> The current health insurance system is a fascist monopolistic one.


That is correct . It is criminal in nature , probably 100 companies and maybe a dozen can sell California.

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## juleswin

How about laws that require insurance companies to charge the same rate to men and women even though one of the sexes uses healthcare more frequently than the other..

Also the many requirement that forces everyone to carry coverage like fertility treatment for people who do not need it

Restricting the sale of insurance across state line as they explain to prevent a race to the bottom(read bottom price) with insurance

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## Boshembechle

Anything else besides the illegality of selling across state lines?

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## fisharmor

> How about laws that require insurance companies to charge the same rate to men and women even though one of the sexes uses healthcare more frequently than the other..
> 
> Also the many requirement that forces everyone to carry coverage like fertility treatment for people who do not need it


My policy covers me for mammograms and pap smears.

But let's leave aside for a second the fact that I have a penis.
My policy _doesn't_ cover important investigative work.  My daughter had an MRI last year to rule out any physical abnormalities that might be responsible for her developmental issues.
And we've been fighting for the last year because the hospital assured us it was covered, and our insurance company balked.  We got stuck with a $10,000 bill for a single MRI.

MUCH of the cost of that MRI comes from the fact that insurance companies fight them.  If the true cost of it was passed to us outside of insurance, it might have only been $2000, and we could have saved up and gotten it, or put it on credit, or used HSA money - the point is, there wouldn't be a year-long battle between three different parties and several employees at each one.
That's all overhead that costs money.

Now the first point is that if mammograms and pap smears weren't covered at all, there might be room on the table for occasional important investigative work.

The second and more important point is that mammograms and pap smears are regular procedures.  Nobody expects auto insurance to cover oil changes - but health insurance does exactly that.  It's not insurance, it's a really $#@!ty payment plan for regular maintenance.
So when something big does happen, it's an uphill battle because the machine you're plugged into is programmed to allow everything that's not why you have insurance just go through, and it's programmed to let everything that IS why you have insurance to cause a protracted battle.

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## brandon

If you want a very simple answer...


Medical Devices Tax

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## Todd

> I don't doubt that there are some government policies out there that distort the insurance market. Can one of you guys please provide some specific regulations/laws/policies that result in higher costs for the average consumer in the health insurance market? Please do not say medicare or medicaid, as I am aware that these already drive costs up.


Here ya go.   Got beacoup charts and everything.  

In 1910, the physician oligopoly was started during the Republican administration of William Taft after the American Medical Association lobbied the states to strengthen the regulation of medical licensure and allow their state AMA offices to oversee the closure or merger of nearly half of medical schools and also the reduction of class sizes.  The states have been subsidizing the education of the number of doctors recommended by the AMA.
 In 1925, prescription drug monopolies begun after the federal government led by Republican President Calvin Coolidge started allowing the patenting of drugs.  (Drug monopolies have also been promoted by government research and development subsidies targeted to favored pharmaceutical companies.)
 In 1945, buyer monopolization begun after the McCarran-Ferguson Act led by the Roosevelt Administration exempted the business of medical insurance from most federal regulation, including antitrust laws.  (States have also more recently contributed to the monopolization by requiring health care plans to meet standards for coverage.)
 In 1946, institutional provider monopolization begun after favored hospitals received federal subsidies (matching grants and loans) provided under the Hospital Survey and Construction Act passed during the Truman Administration.  (States have also been exempting non-profit hospitals from antitrust laws.)
 In 1951, employers started to become the dominant third-party insurance buyer during the Truman Administration after the Internal Revenue Service declared group premiums tax-deductible.
 In 1965, nationalization was started with a government buyer monopoly after the Johnson Administration led passage of Medicare and Medicaid which provided health insurance for the elderly and poor, respectively.
 In 1972, institutional provider monopolization was strengthened after the Nixon Administration started restricting the supply of hospitals by requiring federal certificate-of-need for the construction of medical facilities.
 In 1974, buyer monopolization was strengthened during the Nixon Administration after the Employee Retirement Income Security Act exempted employee health benefit plans offered by large employers (e.g., HMOs) from state regulations and lawsuits (e.g., brought by people denied coverage).
 In 1984, prescription drug monopolies were strengthened during the Reagan Administration after the Drug Price Competition and Patent Term Restoration Act permitted the extension of patents beyond 20 years.  (The government has also allowed pharmaceuticals companies to bribe physicians to prescribe more expensive drugs.)
 In 2003, prescription drug monopolies were strengthened during the Bush Administration after the Medicare Prescription Drug, Improvement, and Modernization Act provided subsidies to the elderly for drugs.
 In 2014, nationalization will be strengthened after the Patient Protection and Affordable Care Act of 2010 (Obamacare) provided mandates, subsidies and insurance exchanges, and the expansion of Medicaid.

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## acptulsa

The OP is kidding, right?  I mean, the OP doesn't really think the clerical workers who fill out all the 'compliance' forms are all volunteers, right?

Has any regulation ever _lowered_ costs?  Even once?

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## oyarde

> The OP is kidding, right?  I mean, the OP doesn't really think the clerical workers who fill out all the 'compliance' forms are all volunteers, right?
> 
> Has any regulation ever _lowered_ costs?  Even once?


Nah , between medicare ,Medicaid , FDA , pretty well ensured everything will cost a ton more......

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## Bryan

Boshembechle,

The list that Todd provided is excellent. Below is another on-point article from Mises that puts these issues into historical perspective and explains the profit motive for them.

Beyond that, the general answer to your question on what "distorts" the market is any regulation that prevents two people from making a mutually agreeable exchanged. That's the principle that's being violated. Or could you explain why two people making a mutually agreeable exchange should be prohibited? Once you understand the principle then it's easy to identify the specific violations- you just have to think though things.



-------

*100 Years of Medical Robbery* 
This weekend (June 11-13, 2004), the American Medical Association (AMA) will celebrate the 100th anniversary of its Council on Medical Education. The medical establishment understandably sees the formation of the Council as a good thing. However, some patients aren't ready to celebrate yet, and their instincts may be good.

History

The American Medical Association (AMA) was founded in 1847 around two propositions: one, all doctors should have a "suitable education" and two, a "uniform elevated standard of requirements for the degree of M.D. should be adopted by all medical schools in the U.S." [1] In the days of its founding AMA was much more open--at its conferences and in its publications--about its real goal: building a government-enforced monopoly for the purpose of dramatically increasing physician incomes. It eventually succeeded, becoming the most formidable labor union on the face of the earth.

AMA's initial drive to increase physician incomes was motivated by increasing competition from homeopaths (AMA allopaths use treatments--usually synthetic--that produce effects different from the diseases being treated while homeopaths use treatments--usually natural--that produce effects similar to those of the disease being treated). This competition did serious damage to the incomes of AMA allopaths. In the year before AMA's founding, the New York Journal of Medicine stated that competition with homeopathy caused "a large pecuniary loss" to allopaths.
Continued: http://mises.org/daily/1547

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## NorthCarolinaLiberty

I will pay a $95 penalty next year because of the new law.  There will be absolutely no change in my coverage or anything else related to this issue.

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## 56ktarget

> There are currently Federal Government regulations that prevent insurance companies from competing across state lines. 
> 
> Get rid of that and *Insurance* prices come *DOWN*.
> 
> The current health insurance system is a fascist monopolistic one.


This will actually increase health care costs because then all the insurance companies will relocate their HQs to the states with the least consumer protection laws, meaning they can abuse their customers and raise prices even more.

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## 56ktarget

> I will pay a $95 penalty next year because of the new law.  There will be absolutely no change in my coverage or anything else related to this issue.


How do you know this was due to Obamacare and not the insurance companies raising their premiums, just like they do year after year?

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## eduardo89

> How do you know this was due to Obamacare and not the insurance companies raising their premiums, just like they do year after year?


Because premiums are increasing at a faster rate than previously.

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## NorthCarolinaLiberty

> How do you know this was due to Obamacare and not the insurance companies raising their premiums, just like they do year after year?


Because I don't have insurance premiums.

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## angelatc

> I don't doubt that there are some government policies out there that distort the insurance market. Can one of you guys please provide some specific regulations/laws/policies that result in higher costs for the average consumer in the health insurance market? Please do not say medicare or medicaid, as I am aware that these already drive costs up.


Making men pay for maternity coverage drives costs up.  Making men and women pay equal amounts drives costs up.  Making young people pay as much as old people drives costs up.  Making all policies cover a laundry list of conditions and medications drives costs up.

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## GunnyFreedom

> I don't doubt that there are some government policies out there that distort the insurance market. Can one of you guys please provide some specific regulations/laws/policies that result in higher costs for the average consumer in the health insurance market? Please do not say medicare or medicaid, as I am aware that these already drive costs up.


The Insurance Market is in and of itself a distortion, or a manifestation of a distortion created in Nixon's 1973 HMO Act.  Until then, someone probably would have been strung up for "pay me a bunch of money and use it or lose it" healthcare.  Putting everyone into blood-debt and then at the mercy of nameless faceless others to make decisions of life and death is probably not the best idea for healthcare either.  If every penny you and your employer ever paid in to health care were kept by you forever, never taxed, and all your healthcare expenses subtracted, also never taxed, Most likely you would come out way ahead.  For the few that do not catastrophic coverage would have covered that at a fraction of the cost.

Health care can be savings-based ala carte again, and again we will climb back to the best health care in the world, now with the most general public access to it in the world also.  Under a free market model, because it is savings based instead of debt based.

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## euphemia

Others have alluded to the one-size-fits-all laws.  Every policy has to be the same, regardless of the differences in people, or the risk they choose to take in their lives.  

In my case I pay for a lot of things I am at zero risk for.  This makes my policy more expensive because I have to pay for the coverage whether I need it or not.

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## dannno

> The Insurance Market is in and of itself a distortion, or a manifestation of a distortion created in Nixon's 1973 HMO Act.  Until then, someone probably would have been strung up for "pay me a bunch of money and use it or lose it" healthcare.  Putting everyone into blood-debt and then at the mercy of nameless faceless others to make decisions of life and death is probably not the best idea for healthcare either.  If every penny you and your employer ever paid in to health care were kept by you forever, never taxed, and all your healthcare expenses subtracted, also never taxed, Most likely you would come out way ahead.  For the few that do not catastrophic coverage would have covered that at a fraction of the cost.
> 
> Health care can be savings-based ala carte again, and again we will climb back to the best health care in the world, now with the most general public access to it in the world also.  Under a free market model, because it is savings based instead of debt based.


I think this is really the big one, and Ron Paul mentions it a LOT.

He refers to it as the "corporitization" of health care. Corporations were given tax breaks to insure their employees, but people could not get tax breaks for individually going out and getting their own health care. This caused people to go through their company, over-insure and almost completely took away the 'market' for medical services and handed it over to the insurance industry. Almost nobody actually paid for medical services anymore, nor did they care the amount they paid. No more market pricing mechanisms lead to ridiculously high prices.

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## enoch150

> This will actually increase health care costs because then all the insurance companies will relocate their HQs to the states with the least consumer protection laws, meaning they can abuse their customers and raise prices even more.


Because that's what happens in every non regulated industry...

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## presence

#1 = Drug Patents
#2 = Cost of FDA Approved Clinical Trials

In 1975 the average drug cost $100M (2014 dollars) to bring to market.

In 2014 the average drug costs $5.8B

http://www.forbes.com/sites/aroy/201...inical-trials/


_

- Parent of a child that takes $2500 patented life sustaining dose every 3 days._

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## TaftFan

Mandates for covering certain services. That is probably the main reason.

Insurance should be for emergency expenses. Not everyday medical expenses.

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## TaftFan

Mandates for covering certain services. That is probably the main reason.

Insurance should be for emergency expenses. Not everyday medical expenses.

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## oyarde

> Mandates for covering certain services. That is probably the main reason.
> 
> Insurance should be for emergency expenses. Not everyday medical expenses.


Correct

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## presence

> Mandates for covering certain services.



Sandra Fluke

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