I've said in numerous posts that I dislike thesis/antithesis conflict promoted by the press between "regulation" and "deregulation."
These Hegelian style conflicts work well in political campaigns, but do not help people solve problems.
In public debate, the term "regulation" usually goes undefined. In some quarters, people use the term to apply to laws. Laws are often called regulation. Others use the term saying that there needs to be a ruling class with arbitrary powers to rule over an industry. I came across another interesting definition of regulation which is as follows:
Regulation means "to make regular." Wiktionary gives the definition of regular: 1.With constant frequency or pattern. 2.(mostly US) Normal; ordinary 3.Obeying rules.
So, the goal of regulation is to take something that is bumpy and unpredictable (like health care expenses) and make it behave in a normal fashion.
Insurance works by having everyone pool their resources with the goal of paying for unpredictable medical expenses.
The goal of health insurance is to make medical expenses regular.
Health Insurance exists to regulate medical expenses.
The industry was created by the regulatory mindset. The history of employer-based insurance is a long and involved dance of political leaders and insurance companies to create an instrument to regulate the health care expenses of the population.
It is true that many pundits have argued for employer-based insurance as a free market alternative to socialized medicine. However, from its very inception, the industry has been and continues to be a product of the regulatory mindset.
The regulatory mindset seeks to contain and control unpredictable expenses. The free market mindset, on the other hand, handles unexpected expenses by having people save in times of health and spend in times of need.
[The Medical Savings and Loan adds a lending component to a health savings account to assure that people have sufficient resources to handle truly unexpected expenses.]
Insurance was the creation of the regulatory mindset. All 50 states have sizable insurance regulatory functions. Since insurance was the creation of the regulatory mindset, the leaders in the insurance tend to embrace and work closely with the state regulation.
The criticism that the failures of a product of the regulatory mindset is the failure of the free market and a sign that we need more regulation is absurd.
If we don't like employer based health insurance, then we should take a free market path like the Medical Savings and Loan.