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.