Opinion Online Health Insurance Needed

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 online, and maybe it’s time that health coverage be added to the list. You might say that such a concept would probably take an act of Congress and you would be right.

Currently, many states erect barriers to affordable health insurance by passing laws that force 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; it would be a national marketplace. 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 online; it’s called the Health Care Choice Act. 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.

The bill has picked up momentum in Congress with 33 co-sponsors at last count and has received the support of President Bush.

A just-released Zogby poll for the Council for Affordable Health Insurance found an overwhelming majority of Americans support such a bill — including larger majorities of Latinos (86{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5}) and African-Americans (85{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5}) — 72{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} support, 15{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} oppose, 13{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} are not sure.

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 & Entrepreneurship Council (SBEC), a trade association based in Washington, D.C. representing over 70,000 member small businesses.