@Invisible: And what we've been trying to explain is why free market principles aren't coming to the rescue here. There just aren't options, and it's not really the law getting in the way. Insurance companies are allowed to operate in as many states as they want, they just have to meet the standards of each state they operate in. Now the ACA did introduce some new standards, but the principle is still the same, insurance companies can operate wherever they like if they meet the state's requirements. So why don't they? Some do, you can get insurance from some companies almost anywhere in the nation. UHG is available in all 50 states. Others just choose to operate in some areas for various reasons, mostly to keep costs down, and hence profits up.
Think about this. Insurance companies operating in each region typically form agreements with the healthcare providers in those regions. This is a way of simplifying coverage and pricing negotiations with preexisting contracts and agreements. Both sides do this because neither one likes lengthy, expensive negation processes. But how is this going to work if we just up and decided to trample on the states and say that any insurance plan from any state should be available anywhere? A consumer in Florida could by Insurance from Alaska if it suited them. Sounds like the free market, sure but it has none of the real benefits of the free market. The Alaskan insurance provider, now has to negotiate with healthcare facilities and providers in Florida, and in fact, they're going to have to do this with every HCP and facility that any consumer in the nation might go to. And that means they're going to have to sort through all the different state and local bureaucracy, and then the HCPs themselves to come to some sort of agreement. The amount of work it would take to form all those agreements, or negotiate all those charges is astronomical, and not cost efficient. The Alaskan insurance provider probably doesn't even want to do it because of that. It's able to provide less expensive insurance for people in the primary regions it operates in sure, but every new region it wants to sell insurance in means it has to enter another realm of negotiation and deal making, which just isn't worth it in most cases.
In addition to that is the very nature of insurance economics. To survive, an insurance company needs a robust pool of clients, that ultimately pays more than it consumes. Large numbers of healthy clients are therefore the most desirable. When these companies compete, the ones with larger bodies of proportionately healthier clients wins. They offer lower prices to win more clients over, and eventually their competition doesn't have a healthy enough pool of clients to continue existing, because in insurance economics having the wrong customer can actually lose you money. This is why regions with lower populations, and less healthy residents have fewer insurance companies competing in the area. It's less profitable, and there isn't room for many insurers to thrive there. They win monopolies. Any new insurer has to compete with the existing power, and any outside insurer moving in has to go through the expensive process of building a coverage network for itself in a new region, so it just doesn't happen that often.
Combine that with the increasing demand for medical care. People know that it can improve and lengthen their lives, so they really want it. Sadly people are also getting less and less healthy, due to increases in obesity and sedentary lifestyle mostly. So this strains the pool of healthy clients that insurers need, forcing them to do what they must, and raise prices. Of course that's not to say that there isn't a good deal of profiteering going on also, as I already mentioned.
So what's the government to do about it? Mandate the existence of more companies and prop them up with cash or force clients to buy their insurance? The individual mandate encourages buying insurance, but it doesn't tell you who you have to buy it from.
Oh, but then there's the healthcare providers themselves. They have almost no choice in anything. They cannot reject patients with critical needs based on their ability to pay, so they're going to need to recoup that somewhere. They go to the only entities they can in that arena, the insurers, who resist that tooth-and-nail. This isn't a typical sort of economic interaction. Patients who opt out risk life and limb, healthcare providers cannot reject patients, or choose which insurance companies they want to deal with, and insurers can actually lose money by having the wrong customers, and the only government interference in this dynamic is that HCPs can't turn away emergency patients, which is a rather non-contraversial ethical issue. And yes, there are some other government regulations, but not ones that are fundamentally changing this dynamic.
So what does the free market say about patients who risk life or limb by not buying (low freedom), providers who cannot refuse critical patients (low freedom), and a middle man trying to make a profit out from an increasingly high risk client pool? It tells you high prices. But insurance is basically a socialist concept anyway. A bunch of people pay into a general fund that provides for needy members at their time of need. We want the sick to get the treatment they need, and to keep costs manageable for all members by having enough healthy members, so the best insurance company would really cover everyone...but we could make it even more affordable by removing the profit motive. A nationwide, non-profit insurance system, a public insurance system.
