The one obstacle often raised to repeal of Obamacare is that we would lose some provisions that people like – such as having children on your policy until they are 26, or accepting pre-existing conditions. People say, “What are you going to replace Obamacare with?” There is a simple answer.
Replace it with a simple law that says that anyone anywhere in the US can purchase his healthcare from any company that is certified to do healthcare insurance business in any state. It will be up to the state legislature in each state to determine the provisions of the health insurance that can be offered in that state. Then let competition solve the problems.
When you can buy your health insurance from any of the fifty states, there will be intense competition from health insurers to offer policies that people want to buy. Competition will do two things: It will bring prices down (it always does), and it will increase choices (this is what competition is all about).
TOTAL Premium Distributions for Private-Sector Employees Enrolled in Employee-Plus-One Coverage (Average in Dollars)
Source: Agency for Healthcare Research and Quality, Center for Financing, Access and Cost Trends. 2010 Medical Expenditure Panel Survey-Insurance Component.
Anyone in Delaware can save $2,545 per year by buying his health insurance in Arizona. Will those in Delaware take advantage of this? You betcha. When insurers in Arizona are flooded with customers from other states what will they do? Raise their rates? Not likely. Here is a golden opportunity to take insurance away from scores of other companies.
Why are rates so different in various states? There are various reasons, but the most common is that each state has different insurance regulations. How come? Because in each state legislature, lobbyists for various providers (drug treatment centers, acupuncturists, chiropractors, psychological counseling, hair restoration services, etc.) get their services written into state law. In one state, insurers are required to offer drug treatment free. That drives up the cost of insurance over policies in other states that do not offer free drug treatment. Quite a few services that some states demand be covered are downright ludicrous. Six states require that hair transplants be part of a health insurance package.
Various states require that visits to the naturopath (one who specializes in herbal medicine), acupuncturist, or marriage counselor be covered. Massachusetts even goes as far as mandating coverage for visits to sperm banks. Many more states also mandate coverage for alcoholism or
AIDS treatment, forcing consumers who lead a healthy lifestyle to help pay for those who do not.
If you live in one of these high cost health insurance states, you are stuck with these high costs. With the possibility of shifting to another state for your health coverage, millions will do so. Then the lobbying will begin. Picture Humana in a high cost state. They will lose half their customers (those who do not want hair transplants or herbal medicine). Will they take this lying down? Of course not. They will tell their customers that they can save $2,000 per year by sticking with Humana (Arizona).
When Blue Cross of any state finds that they are losing their customers, they will lobby the legislature to eliminate these costly frills so they can stay in business. Legislatures will listen. Everyone will soon cover children up to age 26. They will find a way to cover pre-existing conditions. That is the way competition works. You don’t need a federal regulation.
What about the uninsured? According to the Weekly Standard there are about 32 million uninsured today. Some of these 32 million (such as those who make over $75,000) pay for at least some portion of their health care out of pocket. Moreover $57 billion (pre-Obamacare) is provided annually for “uncompensated care,” through the federal government (45 percent), state governments (30 percent), and charitable contributions (25 percent). As a result, “Hospitals, community centers, and physicians provide care to the uninsured.”
Perhaps this is why, as a recent Gallup poll shows, nearly 60 percent of those who are uninsured and make between $30,000 and $74,999 rate their health care as “excellent” or “good” — despite not having health insurance. Why should we ruin health insurance for everyone because a few (less than 10%) of our healthy residents do not want to buy insurance.
Conclusion: Once we get rid of Obamacare, we do not need more federal regulation. Only a law that says that you can buy healthcare from any insurance company in any state that has been approved by that state. Problem solved.