The Right Lessons from Obamacare's Meltdown

The decision of several major insurance companies to cut their losses and withdraw from the Obamacare exchanges, combined with the failure of 70 percent of Obamacare’s health insurance “co-ops, ” will leave one in six Obamacare enrollees with only one health insurance option. If Obamacare continues on its current track, most of America may resemble Pinal County, Arizona, where no one can obtain private health insurance. Those lucky enough to obtain insurance will face ever-increasing premiums and a declining choice of providers.

Many Obamacare supporters claimed that the exchanges created a market for health insurance that would allow consumers to benefit from competition. But allowing consumers to pick from a variety of government-controlled health insurance plans is not a true market; instead it is what the great economist Ludwig von Mises called “playing market.”

Unfortunately, if not surprisingly, too many are drawing the wrong lessons from Obamacare’s difficulties. Instead of calling for a repeal of Obamacare and all other government interference in the health care market, many are calling for increased penalties on those who defy Obamacare’s individual mandate in order to force them onto the exchanges. Others are renewing the push for a “public option,” forcing private companies to compete with taxpayer-funded entities and easing the way for the adoption of a Canadian-style single payer system.

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