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Why should health insurance go up at the rate of inflation? Inflation is just an average of the change in cost of all goods and services considered to be good for measurement.

Some might go up more, or less. Also, unlike the discussion of “health insurance costs”, inflation is based on similar comparison. I’m pretty sure the health insurance I have today provides access to a much higher value of treatment options than 20 years ago, so of course it should cost a lot more.

Half the problem with medicine is that we have a lot more treatment, and that treatment costs a lot more. I haven’t noticed the price of tylenol getting that much higher, or the price of band-aids. Half the drugs my wife takes are so cheap that insurance is meaningless, because they are old drugs.

But if they put me in a new machine for a test that didn’t exist 10 years ago, and my insurance covers it, of course my insurance is going to be more expensive. That’s not how the inflation rate is set, it is adjusted based on the “similar value” rule.

People want the latest treatment; it would be like complaining because your new car with ABS, traction control, side/rear air bags, GPS/NAV, bluetooth, surround sound CD/XM satellite and Onstar costs more than your 20-year-old car did, even counting inflation.

And Health Insurance isn’t just insurance. It’s part of a complex symbiotic system. At BEST, it is a product that is built not to customer spec, but to government spec, with features forced on customers whether they want them or not. It is not like homeowner’s insurance, paying off damages when you go get them fixed. Instead, Health Insurers are inserted between you and your doctor, trying to dictate the types of service you get, and how you get it, telling the doctor how much they can charge (much less than “retail”) — containing costs by cost controls and rationing.

At worse, your employer is thrown into the mix, so you have an EMPLOYER who wants to minimize the cost of the insurance, YOU who want to maximize the value of the insurance, the doctor who wants to maximize his profit, the insurance company which wants to maximize premiums, minimize costs, to drive a maximum profit. Somewhere in all that somebody is expecting to get quality health care for free.

We’d really be a lot better off with a radical transformation of health care: Remove all incentives for employers to buy health insurance, free insurance companies to set up risk pools instead, throw tax money at the problems of pre-existing conditions and artificially limited access, give the tax credits directly to the people who buy insurance (which is really an “insurance mandate” by other means, so I’m not sure about it), and let people decide what they want their insurance to cover.

Regulate not the items that must be covered, but instead a clear comparative listing of those items and costs to make it easy for consumers to shop around. If it becomes necessary, mandate a set of cafeteria menu items that must be included (costs to be determined by the insurer), and then use government regulation to evaluate the costs if it appears insurers are artificially inflating them to avoid having to offer certain types of coverage. That last part though would only happen if things didn’t work out naturally, which they should because with no regulation and fierce competition for 300 million subscribers, the insurance companies will have a great incentive to tailor policies, much like the car insurance company can tailor your car insurance to your own lifestyle.

So if I’m a single guy, I can pick coverage without obstetric care or birth control. If I’m a married man, I throw those in. If I’m young and don’t likely need it, I can eschew prescription drug coverage, at the risk of getting some lifetime illness that requires special drugs which then will be pre-existing condition. Then I have to beg government to help me out. Oh well....