A brief history of the HMO

[Chris]

The individual was first discouraged from buying insurance in 1942 when employee health premiums were made tax deductible to employers--not to individuals. Congress created Medicare in 1965, making individual insurance for those over 65 obsolete. Subsidized, unrestricted health care for seniors lead to an unprecedented frenzy of spending by patients and doctors.

Costs went up, introducing an economic obstacle to individual health insurance. As costs rose, those on the New Left, including then freshman Sen. Ted Kennedy, argued that government ought to pay for everyone's health care and promoted the idea of a health maintenance organization, a term coined by a left-wing college professor.

President Nixon proposed the HMO Act, which Congress passed in 1973. The law created new, supposedly cheaper health coverage with millions of dollars to HMOs, which, until then, constituted a small portion of the market. Kaiser Permanente was the only major HMO in the country by 1969 and most of its members were compelled to join through unions.

The new managed care plans mushroomed with federal subsidies. Employers perceived managed care as less expensive than individual insurance and stopped offering a choice of plans, making insurance more expensive for the individual. The government had effectively instituted HMOs, at the insistence of the left and the capitulation of conservatives and pragmatic businessmen.

http://www.capmag.com/article.asp?ID=2819
http://www.tmci.org/downloads/BriefHist.pdf
http://www.harp.org/hmoa1973.htm

Government creates problem, government attempts to fix problem, government creates a new problem.  Gotta love job security.

[TheSarge]

Once again teh Imperial Federal Government believes that the best way to fix something THEY screwed up is to make it worse.

Institute some meaningful tort reform to prevent the John Edwards' of this world from getting rich on junk science and get rid of the HMO's you'd see the cost of healthcare in this country decline a lot.