As Obamacare’s troubles mount — premiums are soaring, millions of policies that people like are cancelled, and contrary to the president’s promise, many can’t keep their doctors — proponents try to convince us that the law was a good idea. How? By reiterating their fictitious tale of life before Obamacare.

“It is important to understand,” the president insisted recently, “that the old individual [health insurance] market was not working well, and it’s important that we don't pretend that somehow that’s a place worth going back to.”

Why was it not working well?

Obamacare Is Suffocating An Already Sick Health Insurance Patient

According to proponents of Obamacare, the problem was that insurers had too much freedom. Premiums were continually rising, for example, because insurers were supposedly free to jack up rates whenever they felt like it. People with pre-existing conditions had difficulty finding insurance, they told us, because insurers were free to deny them coverage. On this view, the diagnosis was a lack of regulations, and the remedy prescribed was a heavy dose of government controls called Obamacare.

In reality, America’s supposedly free market was made a scapegoat for our health insurance woes. As I show in a new paper published with the Pacific Research Institute, available online, government has long regulated almost every aspect of the business.

Consider just three government controls in place before Obamacare, and their impact.

A major source of government distortion in the health insurance market is the tax code. If your employer pays for your health insurance, you don’t have to pay taxes on those premiums. But if you buy insurance directly from an insurer, you do. The tax exemption for employer-sponsored coverage has tied health insurance to our jobs (one reason why the individual market is so distorted). A consequence is that when people leave their jobs, they are eventually kicked out of their insurance plans. When reapplying for coverage, these individuals risk being turned down if they have developed a pre-existing condition.

Long before Obamacare, the government also restricted the kinds of health insurance products which could be sold. For decades state governments have dictated coverage that insurers must provide. Everything from in vitro fertilization to wigs have been mandated, and each mandate increases the cost of a policy (some states impose more than sixty different mandates). If you were looking for a policy without these services, good luck. It was illegal for an insurer to sell it to you.

Prior to Obamacare almost every state also manipulated how insurers priced polices, forbidding them from offering low-priced policies to those younger and healthier. Insurers were instead required to charge these individuals higher premiums in order to subsidize the coverage of those older and less healthy. When New York implemented these laws in the early 1990s, premiums for thirty-year-old single men almost tripled, and one in six New Yorkers with policies in affected markets had no choice but to drop coverage or see his employer drop it. As a result of the exodus of younger and healthier individuals from the market, premiums for everyone in the state rose higher than they were prior to regulation. Since then, premiums in New York’s individual market have been, on average, more than twice as high as those for the rest of the nation.

For decades, government controls in health insurance were pervasive: from licensing who can sell insurance and where to regulating how insurers organize their finances, to dictating how they price their policies, to decreeing to whom they must sell their services, to mandating what conditions they must cover, to restricting how they advertise. The list goes on and on.

Was the health insurance market plagued with problems?  Yes. The health insurance market was mostly controlled by government. 

And yet, despite the passage of Obamacare, the greatest expansion of government in almost fifty years, the free market continues to be blamed for our problems. For example, in light of skyrocketing premiums last year, a New York Times editorial called for “more [government] power” to fix the state of “lax regulations.” Talk about scapegoating! Not once did the Times consider the impact of distortions caused by Obamacare.

Here’s an idea: perhaps Obamacare is more of the poison that is killing the patient.