INSURANCE ACROSS STATE LINES

In the Truman administration, Congress enacted legislation that exempted health insurance carriers from anti-trust laws, but exposed them to heavy state regulation; regulation so heavy that the states were permitted to erect economic barriers around themselves and exclude out-of-state carriers from doing business in-state. Thus, for example, New Jersey excludes non-New Jersey insurance companies from doing business in New Jersey; this forcing people who live in New Jersey to purchase only Trenton-approved insurance policies from companies that are physically located inside New Jersey. Health insurance is the only nation-wide industry that Congress permits the states to bar from competing across state lines. This is truly counter-intuitive and counter to American values; as the whole purpose of the Constitution’s grant to Congress of the power to regulate interstate commerce, is to keep commerce regular between the states. Congress has done this—prevented the States from interfering with the interstate movement of goods and services—for every conceivable good and service, except health insurance. This, in turn, has suppressed competition, increased costs, and forced folks to purchase only state government approved coverage that they could not possibly need.