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Let’s take a closer look at how interstate insurance sales would impact another important element of consumer-driven health care reform: true insurance. If you’ve forgotten, true insurance is individual insurance. Most people receive their health insurance as the result of a group insurance plan provided by their employer. Some of the benefits of true, individual insurance include portability, better coverage of pre-existing conditions, and greater choice and freedom for consumers.
However, excessive state regulatory mandates can make true insurance outright unaffordable. Consider this excerpt from a 2008 report by the Council for Affordable Health Insurance:
“Access to affordable coverage can vary significantly from state to state, depending on state regulation. For example, community rating and guaranteed issue have made policies in the individual market unaffordable except for the wealthiest residents of Maine, Massachusetts, New Jersey and New York. If residents living in states with unaffordable health insurance could purchase policies currently being sold in other states, they too would have access to affordable coverage.” (Emphasis added)
There are significant disparities between the states in the number and extent of their regulatory mandates. While Virginia and Rhode Island residents are required to purchase insurance plans burdened with a stunning 70 state mandates, Idaho insurers are only restricted by 13. As health care policy expert Avik Roy explains, “Insurance mandates can raise the costs of premiums by 30-50 percent. If I could buy insurance from another state, where regulations are less onerous, I might not be forced to buy a policy that covers drug-abuse counseling.” (Emphasis added)
Also, let me be clear on one thing: We want to lift the barriers to the interstate sale of health insurance, but we do not want the federal government to begin laying down regulatory mandates (such as guaranteed issue or community rating) on insurance. We believe that the regulation of insurance remains the duty of state legislatures and regulators, not the federal government. Whereas the federal government has the power to remove barriers to commerce among the states, we do not believe that it has the power to regulate insurance sales in each individual state.
Increasing market competition by allowing Americans to purchase health insurance across state lines will lead to lower costs, greater choice, and better quality of care. Representative Paul Broun’s (R-GA) Patient OPTION Act is just one of several conservative bills that will allow Americans to purchase health insurance across state lines. It’s an essential piece of the conservative plan to repeal and replace ObamaCare with affordable, consumer-driven, patient-centered health care.
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