it’s a free country. isn’t it?

Which laws is he worried about?

And why not?

Perhaps some of those State’s to keep their insurance companies would deregulate some of their more draconian laws?

What your friend is missing is a good economice education. They cannot ignore is the marketplace and competitive pressures on prices.

Suppose you want to buy a car. Do you go to one dealer and check out his list price, or do you bargain with several dealers – maybe even one in a nearby city, or online – to get the lowest possible price?

However, they would have to compete with all the other companies. That means they would be under more pressure to make better offers at better prices, even if they do move to South Dakota. Also they’d have to worry about retention of current customers. But of course that’s all in theory. Your friend could very well be right, and we’d be seeing a decline in quality. I personally don’t see how it could possibly hurt opening the borders.

I worked in auto insurance, and will be returning to that career. But there were seriously some insurance companies that had a basic monopoly in some states. Who’s to challenge them?

Well, it definitely wouldn’t work. Not only is that already basically implemented in the status quo, but if it were to be implemented in totality, we would see little if any change. The major health insurance companies have already divided this country, that’s not changing anytime soon. As for them moving to South Dakota, I sincerely doubt that. They’ve got too much infrastructure in the places that they currently are, and the incentive is too low.

that is what corporations do. if there is a way they will find it.

Just like the Credit Card companies did.

It wouldn’t matter where they were located, once they had to compete with each other for customers, premium costs would go down and they would increase what and who they covered. I could see them having special riders on their policies to cover different things like abortion insurance so they wouldn’t have to cover everyone for thing they didn’t need like home and car insurance do. We could still require them all to take people with pre existing conditions and not allow them to drop people with catastrophic illnesses. The free market is what will make this work. Right now the insurance companies have protected groups of customers. By forcing people to only buy insurance in their own state, the insurance companies are able to charge high prices and limit coverage.

No, they would still be subject to state laws. But it would not stop them excluding preexisting conditions nor the use of death panels to deny cover to those they are meant to cover.

FACT – Insurance companies in the USA admit to pushing up prices, buying politicians and not paying out claims when they should [1]
FACT – PER PERSON the USA spends more on healthcare than any other nation on the planet [2]
FACT – Obama debated his plans before the election for healthcare [3]
FACT – the chance of a child under five of dying in the USA is greater than industrialised nations with universal health coverage [4]
FACT – Obama was elected by the American people to bring in change [5]
FACT – Obama wants to stop insurance companies from screwing America [6]
FACT – The reforms Obama wants work in the Netherlands and Switzerland [7]

Let me know if my facts are wrong, but please provide proof.

Your friend is essentially correct.

Insurance companies make money when they collect premiums
Insurance companies lose money when they pay for services
Therefore, insurance companies maximize profit when they are able to collect the most amount of money from premiums, but pay out the least in services.

Those who argue the competition rhetoric would prevent this, actually get their rhetoric to fall flat on their face making them wrong. Here’s why:
Insurance company A is located in say North Dakota, to cover basic services mandated by the state (make this variable A) it cost X dollars
Insurance company B is located in say South Dakota, to cover basic services mandated by the state (make this variable B) it cost X dollars
Since insurance company A is mandated by their state to cover a greater number of basic health services then (cost of A > cost of B)

Using the formula (profit = revenue – expense), insurance company B located in South Dakota makes more money than insurance company A located in North Dakota, and can therefore reduce its price to gain a greater market share, thereby taking away business from insurance company A.

In order for insurance company A to stay competitive it either has to:
1) Move to South Dakota
2) Compete in terms of quality by offering higher premiums for more services.

I also have issue with my insurance. I posted my problems on wish123 and got an excellent advise from an expert. I highly recommend the website!