From Kevin Williamson at National Review, Obamacare is Dead [1] :
Insurance is, by its very nature, always forward-looking, considering events that have yet to come to pass but that may be expected and, to a reasonable extent, predicted with some level of specificity. Under ACA, insurance is retrospective. ACA mandates that insurance companies cover pre-existing conditions, meaning events that already have happened, which renders the basic mathematical architecture of insurance — the calculation of risk among large pools of people — pointless. Insurance ceases to be insurance and instead becomes something else, namely a very badly constructed cost-sharing program.
The basic principles of meaningful health-care reform are these: Let insurance be insurance; understand that ordinary, regular medical procedures, such as physicals and prostate exams, are not insurable events, and account for that in your calculations; the only way to mitigate the effects of scarcity on health care is to make it less scarce by expanding the supply of medical practitioners and facilities; the only way to make insurance more competitive, and therefore more affordable and more responsive to consumers, is to increase the number of players in the markets; the best way to deal with people who are, for example, profoundly disabled, children, or otherwise unable to provide for their own care, is direct, clear-eyed subsidy of their medical expenses, rather than laundering those payments through the insurance market; so long as practicing medicine pays less than filing frivolous lawsuits against doctors, there’s going to be a lot of politically induced inefficiency in the system.
Of course markets work for most people, and of course there are exceptions to that. For 93 percent of the population, the solution to health-care reform is: Let markets do their thing. The only real argument is how big a check to write to those looking after the other 7 percent, and how to structure the payments. That’s a real fight, too, but it isn’t the one we’re having. Right now, the Republicans and the Democrats are two political coroners arguing over what time and cause of death to put on the paperwork; rigor mortis set in long ago.