The United States of Insurance

At the Dilbert blog, Scott Adams stumbles his way towards competitive governance. He proposes privatizing government by replacing our current system with an insurance-based model:

In step one of this hypothetical future, the government of the United States buys every insurance company in the country at estimated current values. In this imagined future, the government becomes the insurance provider for the country, and perhaps the rest of the world. The profits from selling insurance will eventually replace taxes. Our government would become a for-profit enterprise…

The biggest leap of faith in this thought experiment is that the government could do anything right. But consider that 90% of private businesses eventually go belly up. If you could measure the performance of your government the way you measure the performance of private companies – by profits, and the government leaders themselves had a profit motive, how efficient could government become? The United States of Insurance would allow that sort of profit measurement and incentive.

There’s no reason to assume monopoly control here. In the absence of a competitive market, it is misguided (to put it mildly) to assume USG management would be more efficient at managing all private insurance firms. Why not allow insurance companies to compete across state lines? Is there an individual mandate? What are the fines for not complying? Who imposes them?