Colorado’s 208 Commission on Health Care Reform wrapped up its initial work in late May and will spend the summer figuring out how much each of the four health-care-reform proposals selected will cost us. Each proposal will take us a long way from the hands-off approach to the health care market we now have.

An unregulated, free market in health care is unlikely to function in the way we expect other markets to. The underlying product, private health insurance, is rife with "market failures," and our society has no willingness to accept the consequences of a free market.

When we say that a free market delivers the greatest efficiency and quality at the lowest price, we base this on the assumptions that the market in question is transparent (i.e., information is readily available), that market transactions don’t concern others (i.e., no other people are affected by the exchange between buyer and seller), and that the incentives or rewards encourage sellers to minimize costs and maximize quality.

In the first instance, health insurance is plagued by information asymmetries. You know your health status, your health risks, and insurance companies don’t. That’s why they often exclude pre-existing conditions.

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