No Tedicare. All is lost?

Fortunately, there is a way to increase insurance company competition in the individual market without a public option. In fact, this can be done by removing some existing government interference.

Individual medical insurance premiums vary a lot by state. They vary by more than per capita medical costs vary by state. This added variation in insurance premiums occurs because of differences in "mandated" benefits enacted by the state legislatures.

But – state legislatures also prohibit insurance companies from selling policies that are not “issued” in their state – that is, policies which do not include all of that state’s legislated benefit mandates. As a result, individuals who live in one state cannot buy a policy issued in another state, even if – and especially if – the premiums in the other state are less. These “state of issue” laws prevent people from shopping for the best deal. These laws restrict competition among insurance companies. Eliminating these laws would allow people to shop in other states where insurance might be much less expensive. That would force more competition on insurers.

This is a clear case where government regulation is driving up costs (mandates), and is also preventing people from shopping in less-costly states (choice restricted to state of issue). So why keep it?