Healthy Choice

With 45 million Americans lacking health insurance, improving affordability should be at the top of any politician’s to-do list. After all, nearly one in three Americans without insurance lives in a household with at least $50,000 in annual earnings. If health insurance were more affordable, millions more Americans would purchase it.There’s one sure way to reduce the price of health insurance-increase competition by expanding consumer choice.Choice and competition are the great taskmasters that relentlessly deliver lower prices and higher quality to American consumers. This is as true for automobiles as it is for artichokes, computers as it is for camping gear.The only exceptions are when government policies limit choice and thwart competition, which is exactly the case with individual health insurance regulations that restrict Americans’ choice of health insurance based on the state in which they reside. It’s time to end the states’ monopolies.That’s the intent of the Health Care Choice Act, a bill sponsored by Arizona congressman Rep. John Shadegg, a Republican from Arizona, that would allow Americans to purchase health insurance from any of the 50 states. “In an era of eBay and Amazon.com,” Mr. Shadegg’s office notes, “There should be a better way to shop for health insurance.”Indeed. Imagine if we were forced to purchase all of life’s necessities, luxuries, and petty indulgences in our state of residence? People making the trek down I-95 from New York to D.C., for example, would be prohibited from filling up their tank with New Jersey’s cheap gas. Residents of the District of Columbia and Maryland could no longer cross the Potomac to Virginia for cheap smokes. Residents of the larger Western states would no longer be allowed to shop online or through catalogs. With such captive consumers, would prices be higher or lower?This absurdity is today’s reality in the individual health insurance markets that have long been the purview of state legislators and regulators. The result: people living a few miles from each other may use the same health facilities but pay drastically different prices for health insurance.A family of four, for example, with parents ages 35 and 38 with a newborn and 3-year old, would pay nearly $400 a month for a family health policy with a $2,500 deductible if they resided in the District of Columbia. If, however, they moved to Bethesda, Md., a similar plan would cost nearly 50% less at $204.That same family will pay more than $1,000 a month should it have the misfortune of being forced to purchase a policy in New Jersey – a state so loaded with consumer protections that no consumer can actually afford the product. A similar policy across the bridge in Philadelphia would only set the family back $300 a month.These disturbing price discrepancies result from the variations in regulations state legislatures place on health plans. Combined, the 50 state legislatures load on more than 1,800 mandates on health insurance plans, requiring companies to cover such things as massage therapists, pastoral counseling, visits to social workers, and hair prosthesis.These regulations are costly. A recent study found that health care regulations add $169 billion to the nation’s health care tab, a per-household cost of $1,500. The annual bill for mandates imposed by the states: $13.5 billion.A tee totaling Mormon in Utah may prefer to pay less for a health plan that doesn’t include coverage for alcoholism or drug abuse – but that’s not an option. Why shouldn’t this family be able to purchase a plan from a state like Oklahoma where it’s readily available?The answer, of course, is that they should. That’s the opinion of three in four Americans. It’s the opinion of 40 members of Congress who have signed on as co-sponsors to Mr. Shadegg’s bill to end the state-legislature strangleholds on health insurance. This reform promises to save money for both consumers and insurance companies by reducing duplicative regulations.“Rather than go through 50 different state regulatory processes, this bill will allow an insurance company to go through one process and sell to people in all 50 states,” says Mr. Shadegg. “We can help people, not by setting up massive new government bureaucracy, but by empowering individuals to make the best choice for themselves and their families.”Now that’s an idea whose time has come.Ms. Pipes is president and chief executive officer of the Pacific Research Institute. She is the author of “Miracle Cure: How to Solve America’s Health Care Crisis” and “Why Canada Isn’t the Answer” with a foreword by Milton Friedman. She can be reached at spipes@pacificresearch.org.

Healthy Choice

Healthy Choice

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