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CF&P  Press Release, October 5, 2009

Center for Freedom and Prosperity Foundation

For Immediate Release
Monday, October 5, 2009

CF&P Foundation Study Shows
Interstate Competition Will Lower
Cost of Health Insurance

The Center for Freedom and Prosperity Foundation today released a study examining how protectionist policies by states, combined with expensive mandates that benefit interest groups such as chiropractors, make it hard for families to afford health insurance. The study, entitled "The Health Care Choice Act: Restoring Competition in the Individual Insurance Market," explains that insurance will be more affordable if the Constitution's promise of unfettered interstate commerce is realized, thus enabling families to purchase insurance plans issued in other states. Authored by Dr. Sven Larson, the study specifically recommends Congressman John Shadegg's Health Care Choice Act (H.R. 3217), as a step forward.

"Dr. Larson explains how mandates drive up the cost of health care by denying consumers the freedom to buy inexpensive no-frills coverage. And since consumers are not allowed to purchase plans issued in other states, this creates an oligopoly that leads to even higher prices," said Andrew Quinlan, President of the CF&P Foundation.

"The Constitution's interstate commerce clause is supposed to prevent protectionism among states," added Dan Mitchell, Senior Fellow at the Cato Institute and Chairman of CF&P's Board, who also noted that, "Dr. Larson's study is another example of how competition between governments promotes better policy and protects individual rights." 

Executive Summary

America's health care system has state-of-the-art technology, highly skilled medical professionals and access to cutting edge medical research. However, government restrictions are artificially boosting costs and making it more difficult for families to get health insurance. More specifically, regulatory intervention by state governments is a significant problem, particularly protectionist barriers preventing consumers from buying insurance policies issued in other states. Combined with expensive mandates that states impose on health plans for everything from chiropractors to breast reduction, the results are less competition and higher premiums. Congressman John Shadegg (R-AZ) has introduced the Health Care Choice Act (H.R. 3217) to restore unfettered interstate commerce and let consumers shop for health insurance plans in a national market. According to one estimate, freedom to purchase insurance policies issued in other states could save some families as much as 30 percent on their health policies. Unleashing the Constitution's promise of unfettered interstate commerce is the most effective way of breaking up the inefficient oligopolies created by state politicians.



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