NCPA - National Center for Policy Analysis


June 23, 2008

The bipartisan possibilities of allowing health insurance to be purchased across state lines appear to be growing more unlikely, says U.S. News and World Report. 

John McCain and Barack Obama have offered very different proposals to reform the health insurance industry: 

  • While both plans accept the basic premise that state-based, highly regulated insurance markets are helping to jack up healthcare costs in the individual market that is critical for the self-employed, the difference between them is in just how much regulation we should accept.
  • Obama would allow the national sale of only private insurance plans that go through his "National Health Insurance Exchange," which means that the insurance plans would have to accept federal government controls on what to cover and how much to charge.
  • McCain says he would allow the nationwide sale of private health insurance without that kind of government oversight.

The amount of government regulation of health insurance is an important question for entrepreneurs, says U.S. News.  Many entrepreneurs are self-employed and can get health insurance only on the individual market, not the group market through which many Americans get coverage via their employer.  Entrepreneurs would prefer the plan that would allow the most diversity of competing options; after all, entrepreneurs love competition.

But Obama\'s plan for a National Health Insurance Exchange means less competition, says U.S. News.  Paul Edattel, healthcare policy analyst for Shadegg, says if you undercut private insurers and place price controls on them, government is going to become the biggest insurance company in the country.

Source: Matthew Bandyk, "Lowering Health Costs for the Self-Employed," U.S. News and World Report, June 19, 2008.

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