A crisis in health care. Your proposed solution? The silver bullet? Allow insurance companies to compete across state lines. Let's assume you're right. What then? And then what? The argument - the predicted effects - seem pretty straight forward:
There you are. But is this the end of the story? Let's see.
Let's suppose each state is now flooded with insurance companies wanting to compete. What does this mean, to the doctors? Myriad sets of forms, all different. And if there is just one new member for a new insurance company, that still means having all this information on file, dealing with customer service, etc. Perhaps a nightmare? An obvious nightmare. Unintended? Of course. But since it's entirely predictable, we can conclude either people didn't think about it, or did and hoped it would not be a problem.
Is this the end of the story? Let's add more to the story.
We concluded, with more carriers comes lower rates. Is this really the case?
For example, suppose a doctor charges $200 for their services. Insurance companies negotiate with the provider to get "best discounts". That $200 fee may be only $100 for BCBS, $110 for United, $115 for Carrier X, etc. Yes, there are already many carriers in every state, contrary to popular opinion. Look up the figures for yourself to see.
These fees constitute a huge chunk of the "premium-pie" ... 80-90% of it, in fact. What will more insurance companies mean, in this context? Lower premiums? How?
Does this defy common sense? When there's more competitors, prices are suppose to go down, aren't they?
What's missing here?
The "product" / "service" does not belong to the insurance company - it belongs to the doctor / hospital.
Where does this lead us?
AN INTERESTING CONFLICT
Our proposed "solution" not only doesn't solve our problem, it creates others!
"FINE", you yell! "I don't want to try 'allow interstate competition'? You want to maintain the status quo, with all it's problems?"
And we're left with the following dilemma:
And because both "Change" and "Don't Change" lead to a series of problems, we can conclude one of two things:
1. pack up your bags and go home: the situation's hopeless;
2. we're trying to change the wrong thing.
But we're talking, at least! There's a dialogue on the table! And now the question becomes, "How do we find the right thing to change?"