This article originally appeared in the Durham Herald Sun on Apr 19, 2009
Are you interested in saving up to 60 percent on your health insurance?
No, this is not a solicitation. This is, rather, an article to inform the public about a state bill that could drastically reduce the cost of health insurance available to you and your family.
A N. C. Senate Bill (SB 725) recently filed by Sen. Phil Berger, a Rockingham Republican, would allow North Carolinians access to health insurance plans authorized in other states. Such a move would lower the number of uninsured in our state and lower health insurance costs at a time when many desperately need it.
Under current law, North Carolina citizens are restricted to purchasing only from state government-approved health providers, and are forced to choose only from health insurance plans that offer the state-imposed myriad of coverage mandates (the exception for this are large employers who provide self-funded insurance plans and are therefore exempt from state regulations courtesy of ERISA).
Coverage mandates are those providers and services that must be covered by an insurance plan, whether the customer wants them or not. North Carolina state government imposes 47 such mandates, with each mandate driving up the cost of insurance premiums.
Consider that North Carolina’s average annual family health insurance premium of $4,104 is higher than 30 states, and is 61 percent higher than Iowa’s ($2,544) and 55 percent higher than North Dakota’s ($2,652).
Similar comparisons exist for individual insurance plans. (Insurance rate data obtained from ehealthinsurance.com’s 2007 report "The Cost and Benefit of Individual Health Insurance Plans")
But thanks to state regulations, you are denied access to these much more affordable insurance options. A basic truism of economics is that you can only make people worse off by limiting their choices. Senate Bill 725 would end the state government’s most severe restriction of your health insurance options, and likely produce significant savings for many families and individuals.
Additionally, opening up the health insurance market to more competitors from out of state will force Blue Cross Blue Shield of North Carolina and other in-state providers to find ways to innovate and compete with more affordable plans. The result will be even more savings for insurance customers.
Similarly, Berger’s bill would lower the number of uninsured in North Carolina, a growing problem.
Surveys consistently show that "affordability" is the number one obstacle keeping more people from obtaining health insurance.
Given North Carolina’s above-average insurance rates, it should come as no surprise that the 16.4 percent of North Carolinians lacking health insurance is more than a full percentage point above the national average.
A recent report by the North Carolina Institute of Medicine, in fact, revealed that North Carolina’s uninsured rate is growing faster than any other state in the nation.
Providing more alternatives would likewise ease the upward pressure on North Carolina’s growing Medicaid burden.
It is no wonder, then, that a July 2007 Civitas Institute poll showed an overwhelming 86 percent of North Carolina voters favored being allowed to purchase health insurance plans offered in other states.
With all that said — who could be against this bill?
Expect heavy opposition to come from Blue Cross Blue Shield, who enjoys their near-monopoly status in this state because of the draconian regulations placed on the health insurance industry.
Forcing them to compete with less expensive, out-of-state options will require much greater effort and focus on consumer needs.
Especially in these difficult economic times, North Carolina Senators who oppose SB 725 will have a hard time explaining why they decided to side with health insurance giants to deny struggling North Carolinians access to affordable health insurance.
I put “conservative” in quote since I believe that you can be conservative and reject myths. The idea that buying across states lines to avoid “evil” mandates and saving 60% is a myth and without any solid economic basis. Let’s start with an assumption:
– Uninsured costs will have to be born. The current requirements on health care institutions would have to change. Are you recommending that the hospitals refuse to treat uninsured patients???
I would challenge Civitas to come up with solid numbers that indicate that it is truly possible to save 60% for EVERYONE.. You can make the risk rating even more perverse and save for some but not all. Secondly the real difference in cost between states has to do with the real cost of delivery. There are significant differences and having an out of state insurer provide a plan will not overcome the difference… there is not enough profit or admin efficiency to make that possible.
Finally let’s get to the idea of mandates being the real problem. I don’t believe that it is the basis, and I challenge Civitas to come up with solid numbers to back it up. It is more likely that you will come up with more people “under-insured” meaning not having insurance to cover real costs.. and I am not talking about electives but things diabetes, cardiac, etc.
So again I challenge Civitas to address these questions with real facts and numbers, not just supposition and myth.
As one that came from a long family tradition of Health and Life insurance sales and service and who spent more than a few years in direct sale of these same types of insurance to “John Q” public, I believe I may weigh in with a little different pespective on the “uninsured”.
I worked tirelessly to find affordable plans for my clients. I sent many clients to the SCHIP plans for thier children’s coverage. But no matter how hard I worked at it the premiums were just out of the reach for many wage earners. Many of the coverage mandates mentioned did indeed drive up the cost of coverage. If a more “cafeteria” approach was made available, plans could at least be issued to cover the major events of ill health such as heart attack, cancer or other major events.
Then there were those that knew they need heath insurance and could pay if they made the sacrifices necessary to pay the premium. Far more times than not, clients that said “we can’t afford that, it’s just not in the budget” but they could afford the new car and truck in the drive, the new widescreen TV and full boat cable services, the cigarettes and beer they drank.
Then there are those that just wanted coverage when they knew something was wrong with them. I’d gripe about having to pay anypart of the health care not covered by insurance and then drop the coverage as soon as they got well.
Then there is the majority of us that have health problems. It doesn’t take much of a problem and God himself won’t insure you. This is the biggest percentage of the uninsured.
In my opion, we could virtually end the “crisis” of the uninsured if we allow almost any “group” of people to offer insurance coverage ie, clubs, churches, schools and the like. If you ask most people that are part of a group/employer sponsored health plan why they work there you will find that a large percentage do so and stay there because of thier own or a family member’s health issues.
If additional choices were available the options to people and the cost of these options can’t help but improve quality and cost.