Guest Editorial

Why can't we buy health insurance on-line?

KAREN KERRIGAN

Americans purchased about $95 billion in goods and services over the Internet in 2003. This dynamism added significantly to entrepreneurship and our economy's overall health and vitality. One important sector that could use a healthy dose of nationwide competition is health insurance. We can buy just about everything else on-line, and maybe it's time that health coverage be added to the list.

A basic law of economics is that competition is good for innovation, quality and price. It's past time that consumers had the opportunity to get the best health coverage at the best deal possible. If health insurance could be purchased on-line, from anywhere in the country, costs would come down and more people would be insured.

You might say such a concept would probably take an act of Congress. You would be right.

Right now, some states erect barriers to affordable health insurance by passing laws that force us consumers to buy insurance plans that cost too much, and often contain benefits we don't want or need.

Since 1980, state legislatures and the federal government have passed more than 1,000 laws that require consumers to pay for such benefits in their insurance policies. Large businesses and labor unions are exempt from these "mandated benefits" because they can self-insure under a law called ERISA. That means individuals who buy their own policies and small employers end up paying the price for these politically popular but very expensive mandates.

The situation is intolerable in some states. Families who buy their own health insurance in New Jersey, for example, are forced to pay anywhere from $3,000 to $17,000 per month - that's right, per month - for a health insurance policy with a $500 deductible.

Nobody has this kind of money, so what do people do? They usually go without insurance. When they are sick, they go to the emergency room where hospitals often overcharge them.

But if consumers could buy health insurance over the Internet in any state they wouldn't have to go without. A New Jersey resident could purchase insurance for themselves or their family in Pennsylvania, New Mexico or Alabama. Using the Internet, we can tear down the barriers to expensive red tape and regulation and open the door to affordable health insurance for millions of Americans.

People would be able to shop the entire country for health insurance plans that fit their particular needs. They wouldn't have to pay for benefits they didn't need or want. Costs would come down, and more people could afford insurance-all without a big government takeover of the health care system and the large tax increase that would be needed to fund such a scheme.

Congressman John Shaddegg (R-AZ) has a bill that would allow us to purchase health insurance on-line; it's called the CHOICE Act. "CHOICE" stands for Creating Healthier Options In Health Insurance Through Choice And Efficiency. Under the CHOICE bill, consumers would be able to use the Internet or physically go to another state and buy a health insurance policy. The policy they buy would contain the benefits from the state where the consumer purchased the policy.

Putting the power of the Internet to work in order to solve one of our nation's most pressing problems is the rationale driving this bill. Every Member of Congress should get on board. If we can purchase almost every other product or service over the Internet, there is no reason why the one item we count on for our health security shouldn't be on the list.

Karen Kerrigan is chairman of the Small Business Survival Committee, a trade association based in Washington, D.C. representing over 70,000 member small businesses.

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