NCPA - National Center for Policy Analysis


July 13, 2006

The Health Care Choice Act would increase access to individual health coverage by allowing insurers licensed to sell policies in one state to sell policies in any other state.  Why is this important?  Under the current system, many localities have only one insurance product available, so the consumer is forced to buy an overpriced product, or forgo insurance altogether.  The state markets are simply not competitive, says Devon M. Herrick, a senior fellow at the National Center for Policy Analysis.

Because both regulations and mandates are made on a state-by-state basis, the cost of insurance varies widely.  For example, California is a large state with a fairly competitive insurance market.

  • A 25-year-old male from Northern California perusing the Web site of the nation's largest independent agent ( can choose from 84 different plans.
  • These plans range in price from $468 per year ($4,000 deductible, no co-insurance) to $2,952 per year (HMO with $0 deductible, no co-insurance and $25 office visits).

Unfortunately, not every state is so lucky:

  • A 25-year-old male living in Kentucky could get an individual insurance policy for $960 per year.
  • That same male, were he a resident of New Jersey, could expect to pay $5,880 per year for similar coverage.
  • Kansas would price the policy at $1,548, and New York state would rate it at $5,172.

The Health Care Choice Act would allow consumers to shop for individual insurance on the Internet, over the telephone or through a local agent.  Residents of any state would be free to choose among policies from any insurer that offers them.  The policies would be regulated by the insurer's home state.  Consumers would be more likely to find a policy that fits their budget -- giving more people access to affordable insurance, says Herrick.

Source: Devon M. Herrick, "Creating a competitive health insurance market," San Francisco Chronicle, July 12, 2006.

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