(1) Lots of people were uninsured. They were forced to show up at hospital ERs and then not pay. Taxpayers ended up paying for this backdoor insurance anyway. It was an expensive and inefficient kind of insurance that placed a lot of unnecessary stress on both the uninsured and the taxpayers.
(2) Even people with insurance were not truly insured. Everyone was just one job loss and one chronic condition away from becoming uninsured because (a) insurance was tied to jobs and (b) insurers could discriminate on the basis of pre-existing conditions.
(3) Medical costs were increasing in a way that just didn't make any sense to me.
Obamacare requires everyone to purchase health insurance (providing subsidies for those who can't afford it) and prohibit insurers from discriminating on the basis of pre-existing conditions. I thought that both these moves were important steps in the right direction. The website fiasco highlighted the government's inability to do anything right, but that didn't bother me so much because I felt that the heart of Obamacare was really a private health insurance market operating under new rules--not a centralized government-administed insurance program that most Obamacare opponents make it out to be.
But Cochrane gives me some food for thought. He claims that the previous system was broken because insurance was tied to jobs:
Health insurance should be individual, portable across jobs, states and providers; lifelong and guaranteed-renewable, meaning you have the right to continue with no unexpected increase in premiums if you get sick. Insurance should protect wealth against large, unforeseen, necessary expenses, rather than be a wildly inefficient payment plan for routine expenses.
People want to buy this insurance, and companies want to sell it. It would be far cheaper, and would solve the pre-existing conditions problem. We do not have such health insurance only because it was regulated out of existence. Businesses cannot establish or contribute to portable individual policies, or employees would have to pay taxes. So businesses only offer group plans. Knowing they will abandon individual insurance when they get a job, and without cross-state portability, there is little reason for young people to invest in lifelong, portable health insurance.