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This situation could have been avoided entirely if health insurance companies weren’t regulated in such odd, inexplicable ways. Consumers who want to buy car insurance can buy it from anyone they want. If they want to work with an in-state provider, they can. If they want to buy from a national entity, they can do that too. This across-state-lines way of doing business gives drivers a lot more choice when deciding how to insure themselves. That additional choice means more competition, which keeps insurance providers on their toes and helps keep automotive insurance affordable and accessible to virtually anyone who needs it.

Health insurance doesn’t work the same way. People can’t buy health insurance across state lines, which means that each state is essentially its own market bubble. Someone planning to buy health insurance—even outside of the ACA exchange—is limited to the insurance providers that offer coverage in that state. State lines serve as barriers to broader competition, which in turn leads to higher coverage rates.

Finding a Path to Better Healthcare Reform

If there is a strategy for healthcare reform that could truly lead to cost reductions and better coverage across the board, it lies in creating more of a free market for health insurance.

The first step to this free market is to curb regulations. Part of the reason health insurance providers are jumping ship on the Affordable Care Act is that it places too much burden on them. It’s important to remember here that health insurance companies are not government agencies, designed only for the good of the people. On the contrary, health insurance providers are businesses aiming to maximize their profits. Regardless of the industry, the fact is that burdensome regulations make it harder for private enterprises to serve their customers, offer quality services, and make money. Trimming some of the regulatory burden placed upon insurance providers—both by the ACA and by other government laws and standards—would lead to a wider availability of options for customers.

The other essential part of the equation is to open competition across state lines. This possibility would be made more realistic by a curbing of healthcare insurance regulations, as the context of the issue right now, is a lack of standardization in how different states handle insurance providers. Allowing consumers to buy insurance across state lines would knock down the barriers that are currently preventing competition in the healthcare insurance industry. A more competitive landscape would bring the industry closer in line with a free market, giving customers the ability to choose the best coverage and “vote” for top providers with their dollars. This competition would increase the quality of coverage while simultaneously decreasing the cost.