Interstate competition would be a good and significant improvement to the free marketing of insurance -- lower premiums through competition.

The idea is contrary to statist control. Hence, Obama is not interested in anything that improves the system.

Greetings All,

I thoroughly enjoyed watching the Axemeister wiggle on the hook in the video snippet as he tried to shift the focus away from the simple concept of purchasing your insurance coverage from a provider located in a state with fewer coverage mandates and lower regulatory burdens than your home state.

But why draw the line there? In this electronic age, Switzerland is just as close as Columbus, Georgia and is home to some of the best capitalized insurance companies in the world with all sorts of packaging options. If they could compete in insurance markets in Georgia then perhaps Georgia consumers could get a better deal. As things stand now, we'll never know.

If you'd like to be overwhelmed with a dizzing array of state by state comparisons of the current mess, head over to http://www.statehousecall.org for a detailed look at things like state required mandates, provider regulatory burdens and my personal favorite, percentage of overweight/obese adults.

The problem I would have with open across the border insurance shop-ability it that it would be a night mare for the lobbyist.
You do realize that it would require them to bribe so many more elected public servants with those "campaign contributions" then they would just pass those cost of doing business expenses along to us the consumer...
The solution to health care insurance costs have three steps..
No,O, Nada,None "we will cut your hand off is caught doing it " campaign contributions from any insurance provider,medical group,legal firm,pharmaceutical company or any other industry connected to health care
Tort reform is a must and a system of identification much like the social security number you are required to obtain when your child is born...
When you are born in the United States or become a LEGAL citizen and have contributed to the Social Security system as a nationalized citizen, for the same number of years that you are required to contribute in order to draw Social Security then and only then could you receive health care that would be subsidized by the government..
No number no health care. PERIOD
It has come to the time when we must MUST start over...
ALL incumbents must be removed in 2010 then the remaining incumbents in 2012..... Throwing baby out with the bath water"? YEP but the baby has become to soiled and spoiled to be cleaned..
What for the life of me I can not understand is why these politicians think they can fix anything ... EVERYTHING a politician touch's , works until they take over, starts off as a failure then goes down hill,usually costs three times what they state is the start up cost then ten times to finish what they predict.
These are the same people who can now fix the most serious problem facing the average family in America...
I have and will continue to ask any politician local,state or federal to name me one ,just one program they have gotten right... I'm talking about ANY program the government administers ..
HELLO... any politician willing to take a shot at it ....
Don

It's disturbing how easily we ignore history and the government continues to advance policies that deter competition and incentives. If Americans received even a basic education in economics, scarcity and efficiency, they'd know more health care, better health care, and increased savings is not only wrong, but its probably almost criminal. Gov't option would force insurance companies to lower price to artificial levels. Let's call this the health version of rent control. Anyone with a basic economic education knows price controls lead to shortages and a degradation in quality. Competition increases supply, driving down prices. Of course anyone on this website knows this, but why don't the American people? I agree with the previous comment, start from scratch with our politicians. Bureaucracy has led to every bubble we've ever had, to include the housing and health care bubble.

if interstate competition was such a cure-all for the spiraling costs of health care in this country then why didn't the GOP introduce legislation in the six years of the bush administration when they also held both houses of congress? or for that matter, why didn't they introduce any meaningful healthcare legislation?

Because of greed.

Paul,

They did propose it in 2006. Remember, the Democrats controlled both the House and Senate. Shot it down...

Interstate Competition in the Individual Health Insurance Marketplace

June 21, 2006 | Author: Devon Herrick
Rep. John Shadegg (R-Ariz.) has introduced the Health Care Choice Act (H.R. 2355), which would allow insurers licensed to sell policies in one state to offer them to residents of any other state. Sen. Jim DeMint (R-S.C.) has introduced a companion bill in the Senate (S. 1015). If enacted, the law would create a more competitive, nationwide individual health insurance market.
Most Americans receive health coverage through employer-sponsored plans. However, nearly 17 million people currently purchase insurance for themselves and their families in state-regulated individual insurance markets. Another 46 million people are uninsured at least some portion of each year. Arguably, some uninsured individuals do not consider health insurance a good buy. This is evidenced by the fact that families who can apparently afford health coverage choose to forgo coverage. Of the estimated 46 million uninsured, about 16 million live in households with annual income greater than $50,000 (half earn more than $75,000 yearly). High costs undoubtedly prevent some of the uninsured from purchasing individual coverage; thus, lower prices could potentially benefit a large number of people.
The Cost of Health Insurance Varies Widely. The cost of individual health insurance varies widely from state to state. In a January 2006 report, The Commonwealth Fund compared the prices of individual health insurance policies in seven states with varying degrees of regulation. The price of policies varied tremendously, due mainly to state regulations rather than variation in health care costs.
For policies with similar coverage and a deductible of about $500:

A 25-year old male in good health could purchase a policy for $960 a year in Kentucky. That policy would cost about $5,880 in New Jersey.
A similar policy available in Kansas for about $1,548 costs $5,172 in New York State.
A policy priced at $1,692 in Iowa and $2,664 in Washington State would cost $4,032 in Massachusetts.
This research illustrates how regulations can impact the insurance market. But it is no accident — rather it is by design. In states where health insurance costs are the highest, a portion of the premiums paid is being used to cross-subsidize the premiums of high-risk individuals. The annual premiums mentioned above for a healthy 25-year old male would be identical for a 60-year old male with high health risks in New Jersey and New York (insurers could charge 79 percent more Massachusetts). The premiums could reflect actual risk in the remaining four states that have fewer regulations.
Many State Markets Are Not Competitive. In competitive markets, producers seek to reduce costs and to offer products that meet customer demands. However, the United States does not have a competitive national market for individual health insurance. Firms in each state are protected from interstate competition by the federal McCarran-Ferguson Act (1945), which grants states the right to regulate health plans within their borders. (Large employers who self-insure are exempt from these state regulations.) Thus there is a patchwork of 50 different sets of state regulations, and the cost for an insurer licensed in one state to enter another state market is often high. As a result, consumers have little choice among plans — forcing them to buy an overpriced product, or forgo insurance altogether.
Moreover, some states have almost no individual health insurance market. For instance, the proportion of non-elderly individuals with individual health coverage was about half in states with high degrees of regulation compared to those with low regulation. For example:
Only three percent of the non-elderly population with health coverage obtained it in the individual market in New Jersey.
The respective share in New York was 3.9 percent and 4.4 percent in Massachusetts.
By contrast, in states with lower levels of regulation a larger share of the insured population obtain individual coverage.
In Washington State, 6.1 percent has done so.
The comparable figure is 7.1 percent in Kansas and 8.4 percent in Iowa.
The Commonwealth Fund also found that the market for individual health insurance is highly concentrated in all the states studied. The largest carrier in all seven is a Blue Cross Blue Shield plan, with 60 percent of the individual health insurance market in New Jersey, Iowa and Kansas, 70 percent in Massachusetts and 90 percent in Kentucky.

Lack of Competition Drives Expensive Mandates. Since each state insurance market is protected from interstate competition, legislators can require insurers to cover services that drive up premiums. For example, about one-fourth of states mandate benefit packages that cover acupuncture and marriage counseling. More than half require coverage for social workers and 60 percent for contraceptives. Seven states require coverage for hairpieces and nine, hearing aids.
State mandated benefits are the bane of the health insurance industry. Insurers are in the business of designing, marketing and administering health plans that consumers are willing to pay for. Even if health plans are sold through employers, is it still the workers that indirectly pay the premiums. When states force insurers to cover providers or benefits that consumers do not want (enough to pay for), both the insurer and the consumer lose. Consumers lose because they are required to pay for amenities they do not want. Insurers lose because mandated benefits and over-zealous insurance regulations drive up the cost and reduce the sales of insurance products.
Proponents often claim a given mandate costs very little — but they add up. There are approximately 1,843 state mandates, according to the Council for Affordable Health Insurance, an industry trade group. Some estimates suggest these mandates have priced as many as one-quarter of the uninsured out of the market.
Two other insurance regulations that raise costs are guaranteed issue and community rating. Guaranteed issue means that any insurance company offering policies must sell coverage to all applicants who qualify, regardless of medical condition. While this sounds like it protects consumers, it actually harms them by driving up prices. When insurance companies are forced to accept all applicants, they raise premiums to guard against losses. As a result, insurance is a poor value for everyone except those with serious health conditions, and people often wait until they become sick to buy it. Subsequently, business dwindles, insurers leave the market and rates go up as competition diminishes. This has happened in all states that require guaranteed issue.
Community rating means that an insurer cannot adjust its premiums to reflect the individual health risk of consumers. While this regulation achieves a level premium for everyone, in reality, healthy people are charged more than they otherwise would be so that high-risk individuals can be charged less. Therefore, the majority who are healthy see their premiums rise. As was mentioned earlier, a plan for a healthy 25-year old male costs six times more in New Jersey than in Kentucky, largely due to community rating. Because of the higher cost, younger (or low-income) individuals with few health problems tend to drop insurance, leaving an increasingly unhealthy risk pool. This drives premiums ever higher — and fewer and fewer people can afford coverage.
Reforms Are Needed. The Health Care Choice Act would allow consumers to shop for individual insurance on the Internet, over the telephone or through a local agent. Critics argue that it is naïve to assume that a person in one state could go to an Internet Web site, such as e-HealthInsurance.com, and enter different zip codes until they find one with the least expensive health insurance. It undoubtedly will not be that simple. Insurers based in one state wishing to sell in another state would have had to register with the state insurance commission in all states they wish to sell. Physician and provider networks would have to be arranged in each geographic area in order to serve policyholders. Variation in the cost of living and physician practice patterns will render actuarial estimates of expected costs different from state-to-state. Yet some insurers will undoubtedly market policies in surrounding states where they think they have a competitive advantage.
Residents of any state would be free to choose among policies from any insurer that offers them. The policies would be regulated by the insurer's home state. Thus, if consumers do not want expensive "Cadillac" health plans that pay for acupuncture, fertility treatments or hairpieces, they could buy from insurers in states that do not mandate such benefits.
However, another type of competition is also likely to occur — among state legislatures and insurance commissioners. Jurisdictional competition, that is competition between state governments, will play an important role in bringing about a competitive market in individual health coverage. The way this will likely play out is states with community rating or guaranteed issue laws — or numerous other expensive mandated benefits — will begin to see insurers from outside their state move aggressively to sell policies without these costly regulations. Young, healthy individuals will flee the expensive (highly regulated) plans causing a death spiral that renders the in-state insurers’ plan financially unstable. To prevent a total collapse of their (domestic) in-state insurers, state legislators will have to “compete” with the legislatures of other states to enact competitive insurance regulations that are conducive to a stable insurance market.
In addition, state legislatures would no longer be able to easily pander to special interests such as lobbyist for providers or advocates for specific diseases wanting mandates to cover their services. Legislators will have an incentive to harmonize insurance regulations to be competitive with neighboring states.
Once this occurs, consumers would be more likely to find a policy that fits their budget — giving more people access to affordable insurance.

http://healthcare.ncpa.org/commentaries/interstate-competition-in-the-individual-health-insurance-marketplace

The reason the H.R 2355 bill was voted down in 2006 was because of the following.

http://archives.energycommerce.house.gov/legviews/109lvhr2355.pdf

H.R. 2355, the “Health Care Choice Act”, is a serious threat to the individual health
insurance market. This legislation would allow health insurance companies to be licensed in one
State but then sell policies in any of the other 49 States without meeting the other State’s
consumer protection and insurance laws. Democrats strenuously objected to the legislation on a
number of grounds and offered a series of amendments to correct its fundamental flaws.

One of the most serious concerns with this legislation is that it would erode State
consumer protections. States would be powerless to stop out-of-State insurance companies from
selling coverage in their State which did not meet important State consumer and benefit
protections. The legislation would undermine access to coverage and benefits for all consumers
in the individual insurance market, and it would particularly hurt those with either existing
medical needs, such as diabetics, cancer patients, pregnant women, and asthmatics, or those who
develop a need for care. It would allow insurers to craft policies that serve only the healthy and
avoid the sick either by excluding them outright from coverage or by pricing policies out of
reach.
Numerous advocacy groups expressed concerns with H.R. 2355.
The American Diabetes Association indicated: “The Association is concerned that by
permitting insurers to be licensed in only one State, H.R. 2355 could cause the end of
guaranteed-issue individual health insurance policies. Many people with diabetes rely on this
type of policy when employers do not offer coverage, or when they are self-employed. Under
these policies, consumers can never be turned down for health insurance coverage because of
their health status. However, insurers in other States without these types of provisions can and
usually do deny coverage to individuals with diabetes because of their pre-existing condition.”

"Interstate competition would be a good and significant improvement to the free marketing of insurance -- lower premiums through competition."

Funny how that often doesn't work in the real world. It's why past Republican attempts to do that have all been voted against since it would companies to do vast amounts of fraud with the result that consumers couldn't bring suit against the companies.

It would also drive out the good insurance plans because they wouldn't be able to compete with the bad insurance plans coming out of state that deny coverage to certain conditions yet the consumers wouldn't be told about this.

Funny how Mike's article didn't mention this fact from the Congerssional Commitee appointed to review House bills submitted to them such as H.R. 2355.

Here is the final word of that commitee.
"In short, we have grave reservations about H.R. 2355 and its effect on millions of
Americans who obtain their health coverage in their State’s individual health insurance market.
This bill, which was brought directly to the full Committee for consideration after only one
hearing in the Subcommittee on Health, clearly would allow health insurance companies to avoid
important State consumer protections and as such avoid serving individuals with medical needs.
The legislation also sets up a confusing and inadequate regulatory structure that is certain to lead
to an increase in fraudulent health insurance companies operating across the Nation. States,
under the legislation, will have little ability to enforce their laws for their residents against plans
operating without a license in that State. And, licensing States will not have the resources or
potentially even the desire to assist out-of-State consumers experiencing problems with an outof-
State insurance company."

Yeah I think if the article by Mike had added that part I don't think people would be supporting that bill.

If only interstate competition and tort reform were sufficient to accomplish the reforms necessary.

But, let's review history. We might discover the big claims are rather hollow.

The HealthCare Choice Act (HR2355 and S.1015 by J.Shadegg (R-AZ) and DeMint (R-SC)that provided for exactly that- interstate health insurance competition, was proposed TWICE, in 2005 & 2007, and n 2005 the Reps essentially had a veto proof majority in Congress and a (ahem) Republican President!

Pray tell, did they pass that which they NOW so fervently claim to support as they have suddenly 'got religion'? Are you kidding??? And they controlled both houses of Congress and the presidency! They sure do support it!

And on Dec 12,2007(HR4460) and AGAIN on July 14,2009 (HR4460) as they reintroduced the SAME bills only now blaming the idiot Democrats?

Unfortunately, while the Democrats propose a politically motivated and structured bill - rather than proposing a truly independent 'best of' option based on a study of the various world health systems - such as Switzerland did in the '90s - we get a bunch of politically motivated pandering on BOTH sides of the isle!

While the Democrats simply play the same 'old school' partisan politics, the Republicans again fail to propose steps sufficient to adequately address the real world problems.

Quote - Paul,

They did propose it in 2006. Remember, the Democrats controlled both the House and Senate. Shot it down...

Interstate Competition in the Individual Health Insurance Marketplace

June 21, 2006 | Author: Devon Herrick
Rep. John Shadegg (R-Ariz.) has introduced the Health Care Choice Act (H.R. 2355), which would allow insurers licensed to sell policies in one state to offer them to residents of any other state. Sen. Jim DeMint (R-S.C.) has introduced a companion bill in the Senate (S. 1015). If enacted, the law would create a more competitive, nationwide individual health insurance market. - endquote

Fascinating revisionist history.

HR2355 was first submitted on May12, 2005!!! And was reported favorably out of committee on Feb. 6, 2006 while the republicans controlled BOTH houses of Congress with Republican president!

Funny how dates alter the 'allegations'.

You can't blame that on the foolish Democrats with their own agenda.

They had their chance to pass a bill they now so fervently claim to support!

And it was again reintroduced on Dec. 12, 2007 as HR4460 and again on July 14, 2009 as HR3217 - where the RINO Republicans now whine that it was the Democrats' fault.

The fact is, NEITHER party presents a coherent proposal worth considering.

While the claims are fascinating to read, it is akin to listening to Sen Kaye Bailey Hutchinson, the queen of pork who opposed the earmark moratorium in the spring of 2008 and who voted for EVERY spending increase in the spending spree under the big government Bush, now whines that she is a fiscal conservative as she runs for TX governor. LOL!