Allow Shopping for Health Coverage Across State Lines – Today it’s easy to use the Internet or toll-free numbers to shop for products. But different rules apply to health insurance. Consumers can only purchase health insurance in the state in which they live, and can’t shop around for a better deal in another state. The President proposes giving people the freedom to shop across state lines to find the best rates for their health coverage.
This addresses one of the three big problems that contribute to health care costs growing faster than inflation – lack of competition, no incentive to shop around and frivolous lawsuits. This doesn’t directly address the lack of incentive issue, but at least this makes shopping for the insurance if not for doctors more viable. With HMOs and PPOs, the insurance companies stand in for their consumers in shopping the cost of the actual care. Of course that causes consumers to cry foul when they aren’t allowed to spend the insurance companies money like there is no tomorrow and contribute to the spiral increases in costs. Perhaps increasing competitiveness for insurance will at least make some consumers look a little harder at how their own behavior influences their costs and if not I imagine that the less expensive plans will be those that are agressive in shopping on the consumers behalf.