Why would adding a public option to compete with current insurers be good for the Colorado market? Does the current level of competition approach cartel or monopoly status? Would the public option seek to contract with some other set of hospitals or physicians not available to current insurance plans? The public option would be subject to the same set of providers and would, presumably, have to compete on the issue of fees and compensation just like private insurance carriers.

And when the public option team figures out that they will be buying at the same rates from the same providers, there will be a temptation to simply set the prices for services. But once the public plan begins to compel providers to accept its fee schedules, we will have left the realm of competition and crossed into the frigid land known as coercion. Having started with the notion of lowering health care costs via increased competition the public option will end up resorting to the government's power of coercion. Coercion does not equal competition.

On the right is the notion that we can repeal the McCarran-Ferguson act of 1945 and allow insurers to cross state lines to sell their policies. Increased competition between carriers across state lines, we are told, will lower premium cost. This rationale is similarly flawed. Take, for example, SelectHealth in Utah. SelectHealth is one of the larger HMOs in the region and is owned by the IHC hospital system. Select health has a great track record in holding costs down in part because they direct traffic to its own IHC-owned facilities.

Let's suppose that McCarran-Ferguson was repealed today and SelectHealth began selling insurance policies in Colorado tomorrow. Can we assume these new policies from across state lines will be cheaper? The facts indicate the answer is no. Since SelectHealth does not have any facilities or providers in Colorado, they would have to contract with an existing provider network or compete with other carriers for the same medical services providers directly. If you are a provider, there is now more demand for your services which leads to higher prices. Increased demand with static supply equals higher prices. And that brings us back to the point made earlier; the only difference is that SelectHealth does not have the coercive powers of government with which to "bargain."

Theoretically, one result of the repeal of McCarran-Ferguson would be increased pressure on state legislatures to remove costly state insurance mandates. Removal of mandates would lead to reduction in required premium, ergo lower-cost policies. Once word gets out that Montana doesn't require chiropractic benefits, hypothetically speaking, customers in Florida shackled to a chiropractic benefit mandate would flock to buy their policies based on Montana's insurance regulations. Given the political leanings of state legislatures across the land, it is safe to say this is not likely to happen any time soon. And that's the point; the politicization of health care leads to increased cost, whether it comes from the left or the right, it doesn't matter.

The problem is not the lack of competition among insurers. The problem lies in the labyrinthine thicket of tax law, employment law and insurance regulation. By adding more regulation, we only complicate things. Our focus should be on improving health status, removing barriers to physician care in the form of tort reform, and equalizing the tax treatment of individual policies. A requirement for guaranteed issuance of individual policies and the removal of pre-existing condition limitations combined with equal tax treatment would go a long way and cost a lot less than current proposals. Not to mention stoking the competitive furnaces of the health insurance industry.