You aren't connecting the dots. A tax on unhealthy stuff - cigarettes, food, etc - that results in reduced use of that stuff can save money through lower health care costs. The UK pays for its citizens health care, thus has an interest in keeping them healthy. Even though the US doesn't pay for everyone's health care, we pay for ALOT of people's health care (and subsidize for others). Unhealthy eating habits result in obesity, earlier onset of chronic conditions, aggravation of chronic conditions, etc - all things that increase health care costs. It has nothing to do with some bureaucrat giving a damn whether you eat a chesseburger or not. You as a taxpayer should appreciate govt efforts to save you money. :)

That is the problem that occurs with supply side government control. People have no incentive to take care of themselves, because the government gives them "free" insurance.(Likewise, if the government gave everyone "free" auto insurance, you'd see a similar disregard for auto safety.)

As for your notion that the government is actually "saving" money, I don't buy it. Any time money goes through the government as an intermediary, they are going to waste some of it. What the government is really doing is trying to differentiate between who is likely to need more health care (drinkers and overeaters) and who isn't. That way people with good health habits are less likely to pay more than those who don't.

Here's a thought. Deregulate health care, and let everyone go back to private coverage. That way it'll be up to the insurance providers to charge more for smokers, obese people, and other 'high risk' users. The decrease in government bureaucracy is likely to save everyone millions, and get rid of those long waiting lists.

First: I heartily disagree that people take care of themselves only to reduce their insurance premiums. In fact, I would argue that insurance premiums play NO real role in people's decisions to smoke, to eat french fries, etc. There are millions of US citizens who buy their own health insurance who eat cheeseburgers for lunch and sit on the couch watching tv rather than exercise.
Second: Government DOES save money if the people for whom it buys health care are healthier rather than sicker. It costs much more to treat a diabetic than to cover the costs of annual physicals and a little labwork for a relatively healthy person with no chronic condition.
Third: You may believe government wastes money anytime it does something and that the private sector is more efficient. That is sometimes the case. It is not always the case. The reason the private sector is not always more efficient is that government provides these things called "public goods" - read your Econ 101 testbook for a full discussion. The private sector also has to MAKE A PROFIT and sometimes the profit margin needed for a business to take on an activity previously undertaken by government exceeds the amount of savings between the cost to govt of doing it and the cost to a private business of doing it. Not always. But health care is one of those things that the government sometimes administers more cheaply than the private sector.
Fourth: What on earth do you mean by "deregulate health care"? Do you mean, the government shouldn't regulate health care, or the govt shouldn't run the Medicare and Medicaid programs? Those are two vastly different things. If you mean the former (and I don't think you do), imagine what choosing a doctor would be like if the govt didn't regulate who could be a doctor and guarantee that anyone holding himself out as a doctor actually met certain education and training standards. Imagine what being in an HMO would be like if the govt didn't build in some guarantees that the HMO couldn't lie to you about what benefits they offer and under what circumstances and how much you would have to pay. If you mean the latter, then know that alot of those people won't be able to get insurance - some because they are healthy but too poor to afford premiums, some because they are not poor but are sick and uninsurable, some because they are not poor and not quite uninsurable but unhealthy enough that premiums would be unaffordable.
Fifth: insurance companies already underwrite individual policies. That's a big reason why most people can't get or afford insurance if they don't have an employer with a group plan.
Sixth: You have posted several entries on your blog relating to health care. I don't mean this in an offensive way (although I know it will sound that way so I apologize) but I don't think you have alot of experience with the health care industry or with government health programs. (If I am wrong about that, I apologize even more.) Its fine to have an opinion about stuff - I realize you're a libertarian and therefore are predisposed to think govt should stay out of stuff, regardless of the details of an issue - but your opinion appears to me simply and only that - an opinion, not based on knowledge of or experience with health systems and govt programs. Do you actually have a background in health care? Not to say you don't have the right to say anything you want here, because you certainly do. Just wondering.

I love this perpetual notion that unless a person works in a certain industry, they have no knowledge of it and should just shut up. I hear that a lot about the war. If you weren't in the Army, you have no right to discuss war.

That said, I will point out that the fundamental difference between government control and private firms is not the profit margin. It is the competition. A government essentially acts as a monopoly, and there is no incentive for firms to cut costs and waste. A good example of this is your telephone service. When telephone service was strictly regulated, and you had only one company acting as a monopoly the price is high. (Similarly with two companies acting as an oligopoly.) When competition was introduced, price decreased as did cost. Incumbent phone companies were forced to compete to protect their market share. That included investing in new technologies to drive down their own costs. Previously, cost was never an issue. They simply passed it on to the end customer.

The idea that competition somehow degrades quality is absurd. If you look at the telephone industry again, or even the airline industry, you see very intense competition. Even with competition, however, they are subject to government standards and regulation for quality of service.

I don't like the notion that because the government provides a service, they should be allowed to regulate you to death. In the U.S. the federal government is constantly trying to wield power over the states. For instance, when they wanted to implement a 55 mile per hour speed limit, they threatened to take away highway funding to states that did not comply. When the regulation was changed, states went back to setting their own speed limits, much to the chagrin of insurance companies.

And just what is so wrong with sitting on the couch watching TV?? I'll be damned if I'm going to let the exercise police come over and tell me I have to put down the remote and get on my exercycle. I paid for both the TV and the bike, and I get to choose which I want to use the most.