BrianGarst.com

Low-cost health coverage will now be “allowed” for Floridians! One can’t help but ask: who was disallowing it in the first place? Oh, that’s right, government was.

With considerable fanfare, Gov. Charlie Crist traveled the length of his state on Wednesday to sign a bill aimed at providing low-cost health coverage to the uninsured by allowing the sale of stripped-down insurance policies.

…His initiative, which both houses of the Republican-controlled Legislature approved unanimously, enables insurers to create bare-bones policies that the governor hopes will sell for no more than $150 a month. That is about 60 percent less than the average cost of a policy for a single person in Florida, according to state insurance regulators.

The policies would be available to any Floridian 19 to 64 who has been uninsured for at least six months and who is not eligible for public insurance. In a critical provision, insurers would be prohibited from rejecting applicants based on age or health status.

To make the policies affordable, Florida will allow insurers to offer policies that do not include many of the 52 services that standard policies must currently cover, like acupuncture and podiatry. The state added a mandate on Tuesday, when Mr. Crist signed a bill requiring coverage for treating autism.

The low-cost plans have to include preventive services, office visits, screenings, surgery, prescription drugs, durable medical equipment and diabetes supplies.

It’s amazing that no where in this coverage is the author able to articulate the most obvious point: if undoing government restrictions lowers cost, then government is at least partly to blame for high costs. It is also, therefore, responsible for the numbers of people without insurance. Anytime you have these restrictive standards which inflate production costs, you necessarily freeze people out of the market by preventing them from being serviced at a price they can afford.

Mr. Crist acknowledged that the low-cost plans would not provide “Cadillac coverage.” But he said he was optimistic that uninsured Floridians would buy the plans after they are able to analyze their costs and benefits, starting early next year.

Milton Friedman addressed the problem of “Cadillac standards” in Capitalism and Freedom:

At a meeting of lawyers at which problems of admission were being discussed, a colleague of mine, arguing against restrictive admission standards, used an analogy from the automobile industry. Would it not, he said, be absurd if the automobile industry were to argue that no one should drive a low quality car and therefore that no automobile manufacturer should be permitted to produce a car that did not come up to the Cadillac standard. One member of the audience rose and approved the analogy, saying that, of course, the country cannot afford any thing but Cadillac lawyers! This tends to be the professional attitude. The members look solely at technical standards of performance, and argue in effect that we must have only first-rate physicians even if this means that some people get no medical service – though of course they never put it that way. Nonetheless, the view that people should get only the “optimum” medical service always lead to a restrictive policy, a policy that keeps down the number of physicians.

While Friedman was addressing medical care itself, the analogy works equally well for insurance coverage. Government mandates enforcing “Cadillac coverage” have kept down the number of people who can afford coverage. In other words, the problem of high numbers of uninsured is government created. If you want to reduce the number of people without medical insurance, allow them to buy policies that are customized to their needs, not ones loaded with unnecessary mandates created by government nannies.