Libertarian law professor Richard Epstein's latest weekly Forbes column is up, about how state regulators in Maine and Massachusetts are rejecting requests by health insurer's for rate increases. In Massachusetts, "Gov. Deval Patrick's insurance commission blocked 235 of the 274 requested increases." In Maine, the insurance commissioner, Mila Kofman, "followed the recommendation of Maine Attorney General Janet Mills to limit the large insurer Anthem by a premium increase of 10.9%, not the 18.5% that it had requested." He argues that health insurance is different from industries such as railroads or electricity where providers can have monopoly power: "Open entry eliminates persistent excessive returns." In other words, if the government just lets the insurers keep raising rates, eventually someone will come along, enticed by the profit motive, and offer to do it cheaper.
"Only competitive markets prized by classical liberals have the long term sustainability that reckless progressives rightly seek," he says.
