A letter to the Heritage Foundation

Dear Heritage Foundation, Jim DeMint,

Thank you for the E-book. I agree with everything presented except the fairly universal misunderstanding that one could purchase health plans across State lines that would create competition and greater choice. This idea is flawed on several fronts the main one is that this would create an unfair burden on consumers that live in States where they have a relatively healthy population and consequently lower premiums adjusted for claims experience, which are quite markedly different from State to State. The unhealthier residents could purchase a plan that has lower premiums in another State creating an unfair pool of insureds. Ultimately, everyone would purchase a plan in the healthier locations. The second main reason it can’t work in our present healthcare delivery system, is that insurance companies have created networks, some which are decades old and well established, which are mostly regional in nature, some in very small geographic locations with narrow and limited provider networks. How could a resident of one State purchase a plan from a carrier in another that has no network affiliation? Granted, buying plans across State lines sounds like a free market concept for health insurance, but in our current system completely untenable. Also, please note that all States are regulated by separate Divisions of Insurance, with extremely different coverage and legal mandates, written expressly by their individual legislative bodies particular to that State alone. That is why today you have carriers that market to selected States, and not all, or just one State.

Again, I agree with the market-based model proposed, but, the idea to purchase health plans in other States cannot work until we can effectively eradicate the need for networks that have been established by health insurance companies, eliminate the manifold health coverage mandates, regulatory bureaucracy at the Divisions of Insurance, and lastly, create a fair risk assessment among diverse pools of geographic and demographic populations.

~ Frank Welsh, Lookout Alliance

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