Throughout the debate over liberals’ health care proposals, it has become clear that  while Americans want health care reform, they reject the direction of the legislation that will be voted on in the House this weekend.  The current health care bill results in a government takeover of the health care system by imposing strict regulations on insurers, mandates on employers and individuals, and an expansion of costly and inefficient entitlements.  States and citizens alike are rebelling against the bill in a bipartisan manner.  State legislators reject the bill because it significantly reduces their authority over health insurance markets and flexibility in managing Medicaid. With only 47 percent believing that it is the federal government’s responsibility to ensure coverage, Americans are rightly alarmed by the intrusive nature of the legislation.

Former Congressman Tom Feeney (R-FL) recently worked with the Heritage Foundation to outline a solution that promotes individual freedom in health care markets:  interstate commerce contracts among states. Interstate commerce for health insurers would create robust competition, lowering costs for the citizens of the allied states.  It is a step towards reform that states can take without action from Washington.  As Rep. Feeney remarks:

The genius of the American federal system provides a natural set of diverse alternatives to centralized system of planning—which would force 300 million Americans into a collectivist straight jacket where all key decisions will ultimately be made in Washington.

Interstate commerce would go a long ways to better America’s health care system.  Interstate contracts are health insurance exchanges across states that create larger insurance markets and enhance competition among insurers.  By allowing citizens of other states to purchase cost-effective plans across state borders, they promote individual freedom to choose among competing plans that offer the best combination of cost and coverage levels.  Done correctly, interstate commerce will reduce bureaucracy, provide simplified one-stop shopping, allow people to get better and more varied health coverage. The nest step is for Congress to enable people to take their plans from job to job without losing the tax benefits of employer-based coverage.

It is important to note that states legislators are currently fully within their constitutional rights to make interstate compacts in the insurance markets.  The Constitution authorizes states to engage in multilateral agreements that support interstate commerce.  It reserves state powers for self governance, including the power to enter into agreement to facilitate interactions between citizens of one state and another.  So long that a state does not restrict commerce in other states, they are not restricted by the commerce clause.  Interstate compacts in health insurance markets expand options outside their jurisdiction.  In health insurance markets, states are the supreme authority.

Health care debate can serve as a catalyst for the rebirth of federalism, and no area is more advantageous for state reform than health care.  States governments and the American people have already voiced their complaints about the perils of the federal  health care legislation.  It is now time for state legislators to take the lead on health care reform.  The best way to do this is by entering into interstate compacts with other states that promote individual freedoms.

Rick Sherwood currently is a member of the Young Leaders Program at the Heritage Foundation. For more information on interning at Heritage, please visit: