It’s impossible for the government to provide insurance.  It’s misappropriating the word “insurance.”  It’s just consumption.  So-called insurance is paid for coercively by taxes.  Paid by those who don’t need to have it.  It’s an undue burden on them.  This also increases the moral hazard of any situation which is protected.  Many people will engage in risky behavior due to the fact that the consequences are paid for by someone else.

Car insurance doesn’t cover oil changes.  It covers catastrophic events.  The state pressures health insurance companies to provide for more than catastrophic services.  As the insurance companies cover more and more, people who don’t need it begin to drop out because it’s too expensive.  The insurance companies can’t afford what they cover so they get the state to make insurance compulsory.  People can now visit a doctor for blood pressure.

The so-called flood insurance has its own problems.  Many would avoid building in flood areas to avoid the cost of flood insurance premiums.  Now that the premiums are covered by others, the restraints are removed from moving into a flood area.  The damage is paid for by those who chose not to live in a flood area if the house is damaged by flood waters.  It’s far from insurance.  It’s costs paid for by other people.

Intervention is cumulative and unstable.  “The government, in its wisdom, perceives a problem (and Lord knows there are always problems!).  The government then intervenes to “solve” that problem. But lo and behold! Instead of solving the initial problem, the intervention creates two or three further problems, which the government feels it must intervene to heal, and so on toward socialism.”  This is a never-ending process.

What’s called insurance is actually consumption.  Words are used to fool voters.  These are far from the only industries the government claims to insure.  If the government claims to provide insurance, you can be sure it’ll raise taxes.  The quote on intervention doesn’t just apply to so-called insurance.  The government intervenes in virtually every single aspect of your life.  Controlling a little bit will lead to a lot.

Reference

Murray Rothbard; Making Economic Sense