Much to our surprise, the Census Bureau reported yesterday that the number of people in the U.S. with health insurance actually increased by 3.6 million last year. That's the good news. The bad news is that nearly three million of them got their coverage through government programs.

The slide toward a government-dominated, taxpayer-supported health sector will continue unless the 45.7 million Americans who don't have insurance now are given more opportunities to buy private coverage.

States could help by lightening their regulatory burdens to encourage greater competition for more attractive and affordable coverage. The federal government needs to do its part by updating today's tax policies to better fit a mobile, 21st-century economy.

A new study by University of Minnesota economists Stephen Parente and Roger Feldman shows that Congress could boost by more than 12 million the number of people who have health insurance without spending taxpayer dollars. The change required is to allow people to buy health insurance across state lines, so they can shop for less expensive policies.

The cost of health insurance varies widely, but it is closely tied to state regulations and legislative mandates dictating what services and providers must be covered. More regulation and less competition generally mean less affordable coverage, and vice versa. For example, a typical health-insurance policy in heavily regulated New York costs more than three times as much as in less regulated Iowa ($388 a month versus $98 a month for the same coverage).

(Read the rest at The Wall Street Journal...)