Real Options for Health Insurance

Two large drivers of high health insurance costs in certain states is 1) bans on interstate competition for health insurance and 2) state-by-state mandates for minimum coverage.  These two government actions lead to some states having remarkably higher health insurance prices than others.  Via Carpe Diem:

The average health insurance ranges from a low of $1,254 in Wisconsin to a high of $8,537 in Massachusetts, and the national average is $2,613. That kind of variation couldn't exist in a competitive market for health insurance. Interstate competition for health insurance would go a long way towards bringing health insurance costs down.

That Massachusetts model sure is doing wonders, huh?  If reimportation of drugs from Canada makes sense, why not of policies across state lines? See where your state ranks here.


  1. Chris:

    An interesting exercise would be to see the correlation between the number of pages of regulation and the price of insurance.

  2. joe:

    i'm living in italy and state healthcare is provided by a 9% income tax off the top. plus the other insanely high income tax. I'd rather pay Massachusetts rates.

  3. tomw:

    Isn't this what was really meant by 'making trade regular' as in the Constitution? Aren't the multiple states' laws acting in restraint of trade?
    What do I know?

  4. Dan R.:

    Those numbers on the blogpost link blew me away, so I looked up census data and it's not even close to what that blog says. No way the national average premium is $2600 if this is to be believed.

    I suspect some kind of "mathipulation" on that blogpost.


  5. Old Grouch:

    A lot of the state-to-state variation is due to various state-mandated coverages. For example, every year I get a notice from my carrier reminding me that they will pay for "implant and reconstructive surgery" should I get breast cancer. Yes, I'm a guy, and yes, I know men get breast cancer, but my buddies over at the statehouse won't allow me to decide between paying extra for a perfect man-boob rebuild, or just saying, "If it happens, just cover it up" and taking a discount.

  6. morganovich:


    your comparison is not apples to apples. total healthcare expenditure is not the same as average healthcare premium. first off, total expenditure will include your deductibles and copays. second, it will include elective procedures like botox, breast implants, lasik, whatever. it likely includes dental as well. it may even include things like over the counter drugs, and almost certainly includes prescription ones.

    these are going to be very difficult numbers to compare to each other.