NCPA - National Center for Policy Analysis

Health Insurance Online

May 28, 2003

Washington is in the throes of one of its periodic preoccupations with the health care of the uninsured. But before it falls for Dick Gephardt's mega-tax hike for "universal" coverage, the Wall Street Journal suggests a better idea: Allow insurers to sell policies online to anyone in the country.

America's 41.2 million uninsured are a worry, but the causes aren't poverty or a lack of compassion, explains the Journal. The main problem is the structure of the insurance market, especially the state government regulations that make health insurance prohibitively expensive to buy.

  • The Congressional Budget Office estimates that for every 1 percent increase in the cost of health insurance, 200,000 to 300,000 Americans drop from the insurance rolls.
  • The numbers clearly show that states with onerous regulations have higher premiums, and higher growth in their uninsured population.

Which is where the Internet comes in.

  • A bill allowing Americans to buy insurance from whatever company in the nation offers the best deal would make policies affordable to millions of uninsured.
  • It would also put pressure on all states to make their markets competitive.
  • Any states' rights concerns are trumped by the Constitution's commerce clause.

Critics will argue that cross-state buying will make it impossible for victims of insurance fraud to sue. But all the legislation needs is a provision giving consumers the right to seek legal redress in their home states, no matter where the insurer is located.

Source: Editorial, "Health Insurance on the Web," Wall Street Journal, May 28, 2003.

For text (WSJ subscription required),,SB105408207813561100,00.html


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