The Answer to Pre‐​Existing Conditions Is Less Government, Not More

Today's Wall Street Journal editorializes against the price controls that President Obama would impose on health insurance, noting that such controls have proven a disaster in the states that impose them.

The Journal offers an alternative way of covering people with high-cost conditions:

University of Chicago economist John Cochrane also argues that in a more rational individual insurance market, people could insure not merely against medical expenses but also against changes in health status. This kind of insurance would cover the risk of premiums rising as you get older and your health condition changes.

In turn, that would free insurers to compete for the business of all patients, including those with pre-existing conditions, because then they could charge enough to cover the costs—instead of passing them to others.

You can read about Cochrane's approach in his February 2009 Cato Institute policy analysis, "Health-Status Insurance: How Markets Can Provide Health Security."