State should look east for affordable health insurance

One of Sacramento’s great laments is the number of Californians without health insurance. The predictable bad solution has been to propose billions in additional taxes. California has been spared so far from this counterintuitive, costly “solution.”

Gov. Arnold Schwarzenegger and legislators ought to look eastward for a better idea. But not to Massachusetts, where government-imposed, so-called universal health care has increased costs and taxes, is running at a deficit, doesn’t cover everyone as promised and imposes fines on anyone who won’t buy state-mandated coverage.

“It’s a proven failure,” says Sally C. Pipes, president of the Pacific Research Institute.

“The least-expensive plan would cost a 37-year-old male resident of Massachusetts $196 a month, and a fine for not having insurance could run half of that, or $98 a month. The same 37-year-old living in Dallas could buy coverage for $98 per month,” says Devon Herrick, National Center for Policy Analysis senior fellow.

Instead, Sacramento should look to Florida and even New Jersey, which point the way to substantially reducing health insurance costs with a more market-based approach.

The Florida Legislature unanimously approved allowing insurance companies to sell stripped-down, no-frills policies, exempted from more than 50 state-imposed mandates, including required coverage for acupuncture and chiropractics.

Lobbyists for every conceivable health care treatment have persuaded states to require insurers to sell the whole menu or nothing. It’s estimated that, nationwide, state mandates impose more than 1,900 individual obligations. But Floridians now can shop cafeteria-style, picking and paying for only the coverage they desire, trimming their costs dramatically and getting only what they deem necessary.

Sacramento also should look to the unlikely venue of New Jersey, where a family’s annual health care policy costs $10,398, compared with the national average of $5,799. Responding to this exorbitant cost, a New Jersey Republican assemblyman is introducing a reasonable remedy.

That legislation would permit New Jersey residents to buy low-cost health insurance from any registered policy in any of the 50 states. Allowing purchases across state lines gives buyers alternatives to New Jersey’s expensive coverage, inflated by multiple mandates on in-state insurance sellers. The Wall Street Journal reports that a healthy 25-year-old man can buy basic coverage in Kentucky for about $960 a year, compared with $5,880 in New Jersey.

Knocking down the props that hold up prices can be done in California without adding a dime to anyone’s tax burden or policy premiums. If more-affordable coverage really is what the Legislature and governor want to accomplish, Florida and New Jersey point the way.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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