Artful Dodger:

I agree with you in that competition would force companies to shape up. An inefficient, poorly manged company would fail, at least in theory. In practice mismangamengt can be resilient and survive, but that is not the point. I just wonder the not-for-profit insurers can compete with the capital of insurers that operate strictly for profit. I imagine that if they are efficient and preperly capitalized they have a fighting chance.

I think that the inability of insurers to sell across state lines is probably a throwback to decentralization of government. Since different states operate under different laws, some insurers could operate in a different way depending on which state they are based on. To allow insurers to operate across state lines would require all states to harmonize their legislation and to many state legislators that might feel like big federal government intruding on local legislation.

At the same time, companies operating in some states might feel that they lose thier monopolistic legal advantage if companies from other states can suddenly compete against them. They will lobby to keep the law as it is.

It is a complex problem. If the solution were simple this debate would have ended decades ago. Countries like Canada came up with a workable public healthcare system in the 1950s and 1960s because they did not have to deal with the legal complexity of harminizing the law across 50 states.

I think that ultimately the US will find a solution that is uniquely proper to American reality itself. Somewhere in all this the US will find its balance between the public and the private sector. Perhaps the sense of urgency comes from 2010, the years in which people born in 1945 turn 65 years old. Economists see this as the start of the baby boomer generation reaching retirement age, and the pressures on the healthcare and pension systems will be great. 2010-2020 will be the years that will define whether the private sector can truly cope with high demand for healthcare services being met at low, stable prices.