Let insurance companies compete across U.S.

Right now, the U.S. does not have a national market for health insurance. It has 50 separate state markets. Erecting walls around each state means less competition and higher prices for consumers. There's not even one market for the Chicago area. If you live in South Holland or Calumet City, your insurance options could be completely different from your Indiana neighbors in Hammond or Merrillville. What sense does that make?

The easiest way to see how insurance competition benefits consumers is to look at auto insurance. That's a huge, nationwide market and companies compete intensively for a share of it. Some stress their low prices, others customer service, whatever gives them an edge in the marketplace. Geico and Progressive have been especially aggressive in touting cost savings. State Farm and Allstate certainly compete on price, but they stress service after an accident. That's why Allstate says "you're in good hands," and State Farm says it will be there "like a good neighbor." Other companies, like SafeAuto, focus on drivers who want only minimum coverage to meet state license requirements. In short, auto insurance companies compete vigorously to provide what different consumers want, and they tell them so in national advertisements. Life insurance companies do the same thing. There are even companies that specialize in comparing policies for customers. Competition drives down excess profits and means better, cheaper options for consumers.

Ever see an ad touting health insurance? They are rare because the markets are small and companies don't need to compete aggressively on price or service. Introducing such competition would be good for consumers, wouldn't require another Washington bureaucracy and could be done quickly.

via Let insurance companies compete across U.S. -- chicagotribune.com. (All emphasis mine.)