An Exciting Health Insurance Idea

The Wall Street Journal reports on a Congressional proposal which could, in an instant, do more for uninsured New Jersey residents than all of Senator Vitale’s much vaunted compassion.

The idea is simple: any company licensed to do business in any state would be permitted to sell its approved product in every state.

As the Journal points out, one of the serious problems driving the costs of insurance out of sight in New Jersey is the plethora of mandates imposed by the Legislature. We INSIST, for instance, on coverage of fertility treatments, pregnancy costs, etc. Unsurprisingly, when EVERYTHING is covered, the costs are excessive.

And we suffer from the dubious distinction of being among the few states which insist that everyone who applies receive a policy, and that their rates not reflect the true costs of coverage. A person who waits until they have contracted AIDS to apply pays only slightly more than their perfectly healthy cousin. Unsurprisingly, absurd premiums drive those without chronic problems out of the market; buying a policy makes no economic sense, as the benefits they receive aren’t worth the premiums they’re asked to pay.

In one swoop, this proposal opens up the market to real competition. As the article points out, a low cost insurance policy can be had for $172 per month in Kansas, less than one sixth what a family would pay for that same coverage in "enlightened" New Jersey.

Instead of massive new taxpayer subsidies, new governmental programs, and a huge influx of cash, freedom might work. An 80% tax cut on the middle class sounds like a winning forumla.