John McCain's health care plan

Is McCain's Health Care Market Oriented or Insurance Industry Oriented?

The NYT tells us that Senator McCain's health care plan is market-oriented, but it is hard to see how this is the case. The plan breaks up existing employer insurance pools and would have each individual buy their own insurance.

There are large disparities in health care costs with the sickest 10 percent of patients accounting for almost 90 percent of costs. Insurers make money by not providing insurance to these sick people. When workers are put together in large pools, then insurers have no choice to provide insurance to sick people, however when they contract with each person individually then they have the opportunity to exclude people with health problems.

It is difficult to see how shifting from a system of employer-provided insurance to individual insurance is a market-oriented reform (there is a market now for employer-provided insurance). It is very difficult to see how this change will lead to more efficiency, as claimed by the expert cited in the article, since it will almost certainly lead to more resources being wasted in screening individuals for prior health care conditions and efforts to conceal these conditions by individuals.