Tear down the barriers to buying insurance across state lines.
Under federal law, states are permitted to regulate “the business of insurance’’ as they see fit, and most have seen fit to allow the sale only of insurance policies licensed by their own insurance commissions. As a consequence, there is no competitive national market for health insurance; there are 50 state markets instead, most of which are dominated by a handful of insurers. This, says Michael Cannon of the Cato Institute, is the “original sin’’ of health insurance regulation.
When it comes to almost any other product or service, Americans would find a ban on interstate commerce and competition intolerable: Imagine being told that you could buy a car only if it was manufactured in your state. Consumers in the market for a mortgage are free to do business with an out-of-state lender; those in the market for health insurance should be equally free to do business with an out-of-state insurer.
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Thursday, November 5, 2009
Instead of a public option, give the public options
In the Boston Globe, Jeff Jacoby shares three ideas to make health insurance more accessible and affordable.