Allowing Interstate Purchase Could Reduce the Number of Uninsured, Analysts Say

Published August 1, 2008

Analysts investigating why so many people are uninsured are increasingly concluding state regulations on the insurance market are one of the biggest causes of the problem, by making insurance unaffordable for many people. States routinely impose numerous mandates on health insurance providers, preventing them from offering basic polices that most people can afford.

Jeff Emanuel, a research fellow at The Heartland Institute and managing editor of Health Care News, noted, “The government of New Jersey has regulated health insurance right out of the price range of most consumers. A family of four living in New Jersey pays nearly $8,000 for the lowest-priced coverage they can legally obtain. Just across the Pennsylvania border, an equivalent family pays barely $3,000 for the same coverage.

“Part of the reason for this is that New Jersey has 42 coverages it requires every policy, no matter how basic, to include. Pennsylvania only has four fewer, but the price difference that results from less regulation is stark.”

Greg Scandlen, director of Consumers for Health Care Choices at The Heartland Institute, agrees. He said there’s a simple solution: getting the state government to allow the health insurance market to function.

“If New Jersey would really like to help people at the poverty level get insurance, they need to repeal those regulations or let people in New Jersey buy coverage in Pennsylvania,” Scandlen said. “New Jersey is perfectly free to do that because there are no [federal government] restrictions on such a move whatsoever.”

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