One of the fascinating issues within the health reform debate is how to improve the insurance market by changing government regulations. While large employers who self-insure are except from state regulations, (and must only conform to limited Federal rules under ERISA), individuals, small groups, and others who actually purchase insurance have their policies regulated by individual states.
Both Democrats and Republicans agree that the current system of insurance regulation creates job lock and other socially undesirable effects, and that insurance companies should be able to sell policies across states lines. However, their solutions are quite different.
Democrats favor national regulation to create a single playing field, and Republicans prefer permitting insurance companies to sell in multiple or all states if they are licensed and regulated in any state. …