"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Health care comprises nearly 20 percent of our national economy, but outdated bureaucracy and red tape have stifled competition and raised costs.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 regulationhascreated50 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.
For example, families could choose between similar policies with a $500 deductible that cost $3,780 in New Jersey, $1,471 in Maine, $466 in Wisconsin, or $355 in Arizona. With this huge variation in price, it's clear that consumers who already have health insurance -- especially those in excessively regulated states like New Jersey -- would see substantial savings. Plus small-business owners, young people and low-income working families who are currently priced out of the market could afford health insurance.
Additionally, this bill would allow insurance companies to consolidate administrative functions by making them comply with only a single state's review of coverage and qualifications, as opposed to 50. The savings would invariably find their way back to consumers as insurance companies lowered premiums to compete for business.
Not surprisingly, this bill faces opposition from lobbyists who have a vested interest in protecting the current monopoly system. Naysayers have already started claiming the sick will be left with skyrocketing premiums and unwitting consumers will be preyed upon by unprincipled insurers in under-regulated states. Scare tactics are always a predictable last resort of monopolies.
The good news is, Americans know firsthand the benefits of a free market -- more choices, lower prices, higher quality -- and there is no reason why we cannot help them see these same benefits in health care. This includes high-risk consumers, who would even have the option to decline coverage they don't truly need, thus increasing their savings even more. And states, currently charged with protecting their residents, will still have the capability and responsibility to go after insurance carriers that victimize consumers. Under this bill, states will simply be held accountable to reconcile their regulatory policies with the realities of a competitive market -- something they already successfully do in nearly every other sector of our economy.
The choice for the future of American health care is clear. Either we continue to allow bureaucrats and regulators to call all the shots and watch costs and the number of uninsured surge or we take steps to create a bold new patient-centered health-care system that puts Americans back in charge.
With the nation's health on the line, Congress must rise to the challenge and empower consumers,offerthem choices, and restore affordability. In doing so, we can insure that America's health care slogan for the 21st century will be "When insurance providers compete, patients win."
Rep. John Shadegg is an Arizona Republican. Sen. Jim DeMint is a South Carolina Republican.
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