Monday, August 24, 2009

There are better alternatives for reform than Obamacare

One particularly appealing one is adopting interstate health insurance sales.


"Currently, we aren’t able to purchase a health insurance policy from another state. The main reason for this is because states mandate various things on insurance policies and these vary from state to state. The National Center for Policy Analysis describes it in the following way:

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.

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.

Another WSJ article entitled “Cheaper Health Insurance” provides a few examples of these mandates from 2005 (may have changed since then):

New York requires every insurance policy sold there to cover podiatry. Acupuncture coverage is mandated in 11 states, massage therapy in four, osteopathy in 24, and chiropractors in 47. There are an estimated 1,800 or so such insurance 'mandates' across the country, and the costs add up.

To illustrate, a 25-year old male in good health could purchase a policy for under $1,000 in Kentucky, yet in New Jersey it might cost upwards of $6,000. Simply put, the state’s regulations on health insurance cause health insurance costs to be higher and because you can’t buy insurance outside of your state, you are stuck with higher costs if you live in a state with a high number of mandates; this leads to a lack of affordability for many people."

Sounds like a viable plan, right? One problem--the Teleprompter -in-Chief doesn't like it.

"I believe that Obama leans towards the view that more of an individual’s life should be under the watch of the Federal government. This is especially true when it comes to your health care. Government health insurance, health care rationing according to government’s view of the 'greater good' are just a few examples of this. By using words that we all identify with such as 'affordability' and 'increased competition', many people believe Obama’s intentions are in our best interest. But are they?

As I mentioned above, Obama often explains that his goal is to offer people more options for health insurance and provide more competition in the market place. Is this true? Put your political views aside and tell me why he would not be for you being able to buy health insurance from another state.

In a WSJ article from back in the Presidential campaign during 2008, the author explains why Obama is against an interstate market:

First, he doesn’t believe a market can work in health insurance. He believes it is necessary for the government to look over everybody’s shoulder to make sure patients are getting the care and coverage the government thinks is appropriate at a price the government considers affordable.

When McCain was promoting this concept while running for President, Obama ridiculed him by saying 'he wants to run health care like they’ve been running Wall Street.' By Wall Street, I assume Obama merely means a marketplace environment. Is that really that bad? Isn’t that how we run just about everything? Is the auto insurance market a disaster because it’s run 'like Wall Street?"


  1. Great point! If we can insure cars all over America, why can we insure people?

  2. The mandates are what kills us. As and example, why should I be requred to pay for a policy that covers drug addiction services when I will never use that service? There should be a way to choose levels of services you are willing to forego. It does not have to go to the level of every service, but you should be able to pick some categories you don't have to pay for. Since you only really have the choices of monthly payment and deductible then you really have no choices. This is what happens when government gets involved.


  3. cpa101, Mandates are bad no matter who sets them. In most cases you and I are paying for society's ills--it's built into the overall premiums, even if it's not stated. If we don't buy alcohol and don't agree with alcohol use, we still have to insure people who drink it. But usually, the person who drinks alcohol or smokes, etc. pays a higher premium as a higher risk. Yet, with the health-care or government involvement we pay for abortions with tax dollars even though we would never want one or agree to one. We can only change that with the politicians in the White House and the judges in the country.

    There is far more involved in this health-care stuff than any one congress can fix. That's why they need to fix what is already in place before they go messing around and giving us more ways for more doctors and agencies to defraud and bilk the public. selahV