Health Insurance Industry Regulation and Health Care Reform

Abstract

This paper compares the economic theories of health insurance regulation with current practice in this market. Our literature review of the economics of regulation and health insurance identifies the market failures which provide justification for government intervention. Comparing these market failures with the current status of federal and state health insurance regulation, we conclude that state health insurance regulation primarily benefits the health care delivery industry and also may have been a strong factor in facilitating the organization of other interest groups (consumers and insurers) to support health care reform. (110, 118)