The solution is more free market, not more government. Cut the mandates, allow full ala carte insurance for individuals, provide every individuals with access to HSA's, then let the market determine what the buyers, and sellers are willing to achieve. Then for those who simply cannot afford insurance allow some government intervention in the form of subsidy. For this the subsidy should only kick in after the premium is greater than 10% - 15% of the individuals income. Both state and federal should share the premium, the state should take the first cut, perhaps the next 10% - 15% of the individuals income, then the fed should step in, and provide the remainder.
Insurers should be required to accept all individuals, but should be allowed to "deny" coverage for preexisting conditions on no more than a one year basis, or outright denial. The insurer should have to accept all other medical insurance issues. Non covered/denied conditions should be actuarially evaluated, and special premium determined. This premium should be what is subject to the state/federal subsidy once the total premium reaches the maximum percentage of income threshold.
This would allow even these individuals to constantly seek the lowest cost insurance on all aspects of their insurance package. It would allow the silent hand of the market to begin to lower costs, and individuals would become more responsible with their medical decisions since they would be paying for their basic coverage, and using the HSA to cover insurance premium, and out of pocket costs.
Or we could go with a Bill Clinton's government style medical system, and end up with the worst medical system (not insurance, but the actual medical system) in the industrial world.