The problem remains government regulation.
In many states, you can't buy catastrophic insurance. You can only buy low deductible -- because that's all the state will allow the insurers to sell.
Insurance companies don't necessarily want to sell policies which cover drug addiction, AIDs and other STDs, even sex change operations. But some states mandate that is the only policy they can sell.
If we reformed government regulations regarding healthcare -- rather than reformed healthcare -- we'd all end up with less expensive and more appropriate policies.
Directly or indirectly, yes. But I think one of the indirect ways they've fscked stuff up has resulted in the EXISTENCE of insurance companies. If people were paying out of their own pocket with after-tax dollars, care costs wouldn't be going through the roof, while still maintaining plenty of incentive for innovation.
Again, I don't think if we get it all worked out right, we'll even have "policies" except for catastrophic. If we don't need grocery insurance, we don't need insurance for routine medical costs.