>>The only way to hold down costs is to include as many healthy people as you can in the insurance pool so you can use the surpluses from healthy members to help pay the costs of others. Medicare effectively does this by sharing its costs across most of the community. The insurers don't do this- they risk-shunt, trying to gather healthy customers to themselves and pushing sick or risky people elsewhere. That's the main form of "competition" between insurers, because it allows them to extract surpluses as profit rather than to cover care for people as they age or get sick and need care. So you'd need to legislate to prevent this sort of discrimination and as soon as you do that, you need individual mandate as well so people don't check in and out of insurance to cover healthcare needs as they occur.
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>There is never an "only" way unless you narrow your focus too much. Loosen the insurance regulations, reform the legal climate, incentivize new technology investment, and let the market go to work. None of the current schemes being debated addresses limiting the 3rd party payor. The concept of insurance has been corrupted in the health industry to be an umbrella solution instead of a risk management tool. As a result, a fundamental flaw emerges in nearly every cited system. The actual costs are hidden from the consumer. Once consumers regain access to pricing information and a direct involvement in the payment process prices will come down.


Loosen insurance regulations? And let the market go to work?

I thought that everyone now agrees that you unregulated capitalism leads to disasters. Insurance companies should be highly regulated to offer quality and basic care, cannot refuse someone on his/her medical history. The market is not able or not willing to do that as history has shown. On their turn insurance companies could force pharmacies to lower their prices or else search for cheaper alternatives.

If the government defines the rules under which the insurancecompanies can operate in this market, then we (you) are a giant step in the right direction. Then the government does not have to act as an insurance company, merele settign the rules.