(10/10/04) I’ve been participating in the Lake Champlain Chamber of Commerce Health Care Committee as they formulate their legislative policy statement for 2005. Members recognize the current health care system crisis and that a new creative solution is required to achieve an affordable and effective health care system in Vermont. Thinking outside the box, I offer the following approach for you to think about.

As Americans become computer literate, more goods will be purchased over the Internet. In 2003, close to $100 billion in goods and services were purchased on line. One area that could benefit from the Internet is health insurance. There are only a few health insurance carriers in Vermont which severely limits our options for coverage. I believe it’s time for health insurance companies to offer their services via the internet.

Advocates of free market economics indicate competition is good for innovation, quality and price. Consumers should have the ability to get what coverage they want and at the best price possible. If health insurance were available online from any carrier in the country, costs would be more competitive and more people would be insured.

Wouldn’t it be great for a single mother of two to acquire a high deductible policy for about $50 a month in Vermont as she now can in California? Today, a 60 year old can purchase a high deductible policy in South Carolina for $110 a month and it costs almost 2X that for a healthy male in Vermont that age.

Today, states erect barriers to affordable health insurance by passing laws that force consumers to buy coverage they don’t want or need and at a high costs.

For the last two decades, states like Vermont have passed mandates requiring consumers to pay for such benefits in their premiums. However, large companies who self-insure are exempt from these mandates by federal law. So, individuals or small businesses that buy their health insurance policies pay the price for these politically imposed mandates and some reports indicate they impact insurance costs by 40% or more.

In Vermont, I’ve heard of family policies costing around $10,000 a year. Few can afford that kind of money and more people are going uninsured. Currently 10.7% of Vermonters are uninsured and another 25% receive state health benefits through Medicaid.

If Vermonters could buy health insurance via the Internet they could buy what they want, comparison shop for the best price and eliminate the barriers to expensive regulations and red tape. They could shop across the country for health insurance plans including the new Health Savings Accounts. Competition would force the costs to come down and more people would be in the insurance pools because coverage would be more affordable.

All this can happen without government take over of health insurance or the health care system. There wouldn’t have to be tax increases to use this approach.

Congressman John Shadegg, (R,Az) and House Speaker Dennis Hastert, (R, IN) introduced a bill that would allow us to purchase health insurance online. The bill is called “CHOICE Act.” “CHOICE” stands for Creating Healthier Options in Health Insurance Through Choice And Efficiency.

The bill, as written, would allow consumers to use the Internet or travel to another state to purchase a health insurance policy. The coverage purchased would contain benefits allowed in the state where the consumer contracted for coverage.

The power of online Internet to purchase health insurance coverage could be phenomenal. Though there are state regulatory safeguards that need addressing, we should all get on board to push this proposal and urge our Congressman to co-sponsor this legislation with Congressman Shadegg and Speaker Hastert. There’s no reason this market driven approach to health insurance can’t be advanced. We purchase almost every other product through the Internet. Our health protection shouldn’t be an exception.

Health Savings Account Progress

A Health Savings Account (HAS) is an empowerment idea recently passed by Congress. This health insurance plan gives employees more choice and control over their health care. They or their employer can make a pre-tax annual contribution of $2,600 and families can put up to $5,150 into an HAS. Funds are used for qualified medical expenses and can be withdrawn tax-free.

Some are downplaying the advantages of Health Savings Accounts (HSA) but data shows they have broad appeal. A study by Assurant Health shows that 43% of those purchasing them were previously uninsured.

The Assurant study further found:

• 77% of those purchasing HSA are families with children
• 70% of HSA purchasers are over age 40
• 29% of purchasers have annual family incomes of less than $50K

Many think employers will augment health coverage with HSA. They provide a lower-cost option that incorporates incentives and a direct connection for employees to be better informed about their health and health spending.

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Thank you for your calls and notes. I can be reached at 658-3975 (home), 1-800-322-5616 or 228-2228 (State House) and via e-mail.

Rep. Frank Mazur
South Burlington