Policy Documents

How to Create a Competitive Insurance Market

Devon Herrick –
June 15, 2006

Rep. John Shadegg (R-Ariz.) has introduced the Health Care Choice Act (H.R. 2355), which would increase access to individual health coverage by allowing insurers licensed to sell policies in one state to offer them to residents of any other state.  Sen. Jim DeMint (R-S.C.) has introduced a companion bill in the Senate (S. 1015).  If enacted, the law would create a more competitive, nationwide health insurance market.

The Health Care Choice Act would allow consumers to shop for individual insurance on the Internet, over the telephone or through a local agent.  Residents of any state would be free to choose among policies from any insurer that offers them.  The policies would be regulated by the insurer's home state.  Thus, if consumers do not want expensive "Cadillac" health plans that pay for acupuncture, fertility treatments or hairpieces, they could buy from insurers in states that do not mandate such benefits.  Consumers would be more likely to find a policy that fits their budget -- giving more people access to affordable insurance.