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Leading policy-makers and scholars explain how market forces, deregulation, and consumer choice can work to improve health care for all Americans.

Commentary

Competition is the Way
John Shadegg, Jim DeMint, Washington Times, 5-1-06

U.S. Representative John Shadegg (R, AZ) and Senator Jim DeMint (R, SC) explain why Americans should be able to choose health insurance from a national market. Under the current system, individuals who lack employer provided health insurance can only purchase the health insurance package that state regulators (and special interest groups) want them to buy.

"When businesses compete, you win," is true for consumers in every industry in America. From cell phones to computers, quality is improving and costs are shrinking as companies fight to offer the public the best product at the best price. But this philosophy is sadly missing from our health–care insurance system. Health care comprises nearly 20 percent of our national economy, but outdated bureaucracy and red tape have stifled competition and raised costs. As a result, today more than 45 million are without any health coverage.

As President Bush and many others have noted, our third–party payer health–care system was built for the world of yesterday, not the opportunities of tomorrow. The current patchwork of state regulation has created 50 mini–monopolies that are driving up costs for everyone, and no one bears this burden more than the ill, the elderly, and the working poor. New regulations cannot solve the problem, because excessive and unnecessary regulations are the problem.

In the past 30 years, state governments have instituted more than 1,500 mandated benefits. According to the Council for Affordable Health Insurance, these mandates have increased the cost of individual health insurance by as much as 45 percent in some markets. Some people may not want or need health insurance coverage for drug abuse treatment, hair pieces, or acupuncture—but if the state they live in mandates it, they can only buy policies with that coverage. You can be sure the policies are more expensive as a result. Speaker Dennis Hastert likened the situation to requiring everyone to purchase a Cadillac when all they want or need is a Chevy.

To address this problem, we have introduced the Health Care Choice Act, which would break down these state–imposed barriers to affordable insurance. Under the Health Care Choice Act, individuals would continue to shop for health insurance as they do now—in consultation with an insurance agent in their hometown, online, by mail or over the phone. But consumers would no longer be limited only to policies that meet their state's regulations and mandated benefits. Instead, they would be able to select from a wide array of insurance policies that are qualified in one state and offered for sale in multiple states, thus allowing them to choose the policy that best suits their needs—and their budget.



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