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Message: <blockquote data-quote="tarchon" data-source="post: 586846" data-attributes="member: 5990">Here's the math.  State sets price cap in accordance with unrealistic consumer demands.  Insurers can't afford to insure people for less than the price cap.  Insurers, not wanting to lose money, stop doing business and leave state.  (See also "California Energy Crisis")  State has to set up insurance program.   Government programs are typically horribly inefficent.  Taxes get hiked.  People end up paying more than they would have if insurers were allowed to set their own prices.  (See also "why centrally planned economies seldom work well.")Price controls are usually only useful with state mandated monopolies (utilities are a common example).  Price controls applied to competitive markets usually have results that range from ineffective to catastrophic, even if the demand for the industry derives from a state mandate.  And in fact most states do regulate insurance companies in some respects.  They're fairly commonly required to be able to prove their solvency, for example, and I have personal experience with one case where the state of Arizona put an insurer into receivership after it was found to be incapable of meeting its likely financial obligations.We pay ridiculous insurance rates primarily because of stupid reckless drivers (and fraud), not because of insurance companies.</blockquote>