Coloring Outside The Lines
Team Obama keeps quacking about competition in health care being key. So...why don't they actually do something meaningful about it, like as the WSJ suggests, let insurance companies sell health-care policies across state lines -- a proposal that's been before Congress since 2005. The WSJ quotes AARP dude John Rother mistakenly arguing against it:
Mr. Rother: "There are states and localities where health care is much less expensive than others, and if we allow people to buy all their insurance from those places, it will raise the rates there. And it's called risk selection. It's a real problem, given the fact that health care costs can vary substantially from one place to another. So I think while the idea sounds appealing, the consequence would be it would make health care more expensive for those people who live in those low-cost areas."How did Mr. Rother arrive at this conclusion?
His claim assumes that what makes insurance expensive in places like New Jersey--where the annual cost of an individual plan for a 25-year-old male in 2006 was $5,880--is merely the higher cost of medical services in the Garden State. He sounds an alarm in the rest of the country by suggesting that an individual living in, say, Kentucky--where an annual plan for a 25-year-old male cost less than $1,000 in 2006--would be asked to subsidize plan members living in high-priced states.
That's not how interstate insurance would work. Devon Herrick, a senior fellow with the National Center for Policy Analysis who has written extensively on this subject, notes that insurance companies operating nationally would compete nationally. The reason a Kentucky plan written for an individual from New Jersey would save the New Jerseyan money is that New Jersey is highly regulated, with costly mandated benefits and guaranteed access to insurance.
Affordability would improve if consumers could escape states where each policy is loaded with mandates. "If consumers do not want expensive 'Cadillac' health plans that pay for acupuncture, fertility treatments or hairpieces, they could buy from insurers in a state that does not mandate such benefits," Mr. Herrick has written.
A 2008 publication "Consumer Response to a National Marketplace in Individual Insurance," (Parente et al., University of Minnesota) estimated that if individuals in New Jersey could buy health insurance in a national market, 49% more New Jerseyans in the individual and small-group market would have coverage. Competition among states would produce a more rational regulatory environment in all states.
Another possibility if insurance is sold across state lines is that the insurance companies all go to the states with regulations most friendly to them and that offer consumers the weakest protections. Like how so many credit card companies are incorporated in Delaware.
Whatever at August 24, 2009 7:37 AM
Or states would change their minimum required coverage laws so that single men don't have to pay for coverage for pap smears and breast cancer screenings.
Last I knew men didn't get cervical cancer. And forcing them to pay into such a system under the guise of "well, they'll eventually get married and their wives will need this stuff" is the highest form of bullshit there is.
brian at August 24, 2009 7:48 AM
All types of corporations incorporate in Delaware because of the low costs and business-friendly legal system.
Conan the Grammarian at August 24, 2009 11:10 AM
Allow insurers to sell across state lines, and offer low-cost insurance in which purchasers agree to 1) binding arbitration for all disputes and 2) humane euthanasia.
BTW, Kaiser already compels arbitration, and often does not even buy the latest and best medical equipment. They were late onthe MRI technology, for example. And I guess when Kaiser pulls the plug, there isn't much a patient can do about it. And that is good.
The Kaiser model may be the national solution.
i-holier-than-thou at August 24, 2009 11:35 AM
How Medicaid is designed in Oregon
08/07/09 - The Independence Institute (video 1:30)
Don't look, government healthcare and sausages are being made here.
Healthcare costs are high because government requires that all sorts of extra services are covered by the allowed healthcare policies. These services are the ones that can be used every year, to provide income for provider groups. Emergency services don't have a lobby, so forget about them.
Oregon provides Medicaid through government rules drawn up by political lobbying each year. Priorities: Smoking Cessation - High, Head Injury - Low.
Andrew_M_Garland at August 24, 2009 11:37 AM
I think we need the FBI to bring ihole in for questioning. He seems all too eager to start snuffing people. I suspect he might be a serial killer in waiting.
brian at August 24, 2009 11:41 AM
The problem as I see it is this isn't about common sense reforms that would benefit anyone; this is about a government and "Celebradent" that want total control.
Socialize health care and the socialization of every aspect of our lives is next. This is not about ideology. This is a calculated attempt, by our government, to take the constitution and tear it up.
We the People need to fight back. Individual state rights are all but gone, DUI laws subjugate the constitution, taxation without representation is the norm, bailouts of businesses and banks, printing money without regard to the fact we can’t pay it back and on and on and on.
The elitist Washington politicians have nothing but contempt for us. And the majority of us are too uninformed to know the difference. The ones who are paying attention are labeled unpatriotic, unintelligent, hate mongers or racist. The reform Washington wants is a reformation of the constitution so it no longer is “by the people for the people” but rather “by the people for the government”!!!
VOTE THEM OUT, VOTE THEM OUT, VOTE THEM OUT. This is the only real power that we have left!!!
Ed at August 24, 2009 12:05 PM
Margaret Thatcher was a conservative Prime Minister of Britain. She said:
"The problem with socialism is that you eventually run out of other people's money"
Andrew_M_Garland at August 24, 2009 12:22 PM
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