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Market failure in health care?

Four years ago then-Senate President Peter Welch, now Congressman, declared, not for the first time, that "the private sector approach [in health care] has failed." That assertion has been echoed repeatedly by all of the advocates of increased government control over health and medicine, culminating in a wholly government run health care system.

It never seems to occur to such people that, while there remain private actors in the health care sector, that entire sector has been distorted, restricted, mandated and indeed corrupted by decades of government meddling.

A century ago the American Medical Association, concerned that a glut of new doctors would drive down doctors' fees for service, conspired with doctor-dominated state medical licensing boards to restrict access to medical schools and limit the number of emerging MDs.

Through most of the 20th century and even still the physician's guild successfully pressured their state boards to strictly control routine medical duties provided by nurses, deny licenses to doctors working on contract for fraternal lodges and cooperative hospitals, and discipline doctors using new technology that threatened to lower treatment costs and thus fees.

Responding to pressure from interest groups, legislatures have insisted that health insurance policies cover over a thousand specific treatments. These include such things as in-vitro fertilization, hair replacement, pastoral counseling and childbirth, even for single men, infertile women, and couples in their sixties.

Even more premium-inflating are guaranteed issue and community rating. The first of these requires insurers to accept all comers, even those who skip buying insurance until they get sick.

The second requires young people, just at the lower-income beginning of their working careers, and paying for college loans, home mortgages, and child rearing, to pay sharply higher premiums for the benefit of their sixtyish parents and grandparents who are almost inevitably better able to pay health insurance premiums. These "Robin Hood in Reverse" features are key provisions of ObamaCare.

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