1. Open up competition ACROSS STATE LINES. As long as a health care plan meets a states requirements, it shouldn't matter if the plan is sold and/or administered out of state or not.
2. Pre-Existing Conditions must be covered. Period. Whether or not that means creating high risk pools for affected individuals or not I don't know. It's just unacceptable that those with pre-existing conditions no matter how minor are excluded from coverage and that has to stop.
2. If an insurance company must cover a pre-existing condition, then it's not really insurance.
Item #2 can be addressed through high risk pools as you said, or through an idea I've considered for some time where insurance carriers would be obligated to share risks for "pre-existing conditions" as defined by their own policies. In other words ... Suppose I have insurance through Company A and I have a serious medical condition, then my employer moves to Company B. Company B should not be forced to cover every expense associated with my "pre-existing condition," but Company A should still be on the hook for part of my expenses through a re-insurance market of some kind. I would think this sort of thing can easily be worked out in state regulations.