A Health Care Bleg

Could someone attempt to provide a reasonable defense of why we shouldn’t allow the purchase of health insurance across state lines?  Is there any public interest in preventing said sales?

I’d particularly love to hear from libgressives who oppose such a policy change.  And to (try to) incentivize other bloggers to provide such a defense, I’ll provide a link to the best response.

16 thoughts on “A Health Care Bleg

  1. The only reasons I can think of are:

    1. Certain states want health insurance to provide X benefits, while others to provide Y benefits. While this is not the best argument, it appeals to the Federalist in me.

    2. Doctors and health systems negotiate with insurance companies to provide coverage. If a hospital in Pennsylvania comes across a small insurer from Arizona which it knows nothing about, how would it deal with the insurer and coverage? I can see a whole host of problems arising, but then, providers deal with this sort of question now, and seem to do just fine with it.

    The best argument I can find is the Federalism one, but then, if this isn’t interstate commerce, I don’t know what is.

  2. The traditional argument is that it will result in a “race to the bottom” where insurance companies will cluster in states that favor insurance companies against insurance consumers, ala credit card companies.

  3. Yes, I’ve heard that argument. But is it really likely such a system will be as ominous as its loudest detractors say it will be? And is this (from Ezra Klein quoting the CBO) the most likely result (and is this that bad?):

    The legislation “would reduce the price of individual health insurance coverage for people expected to have relatively low health care costs, while increasing the price of coverage for those expected to have relatively high health care costs,” CBO said. “Therefore, CBO expects that there would be an increase in the number of relatively healthy individuals, and a decrease in the number of individuals expected to have relatively high cost, who buy individual coverage.”

    http://voices.washingtonpost.com/ezra-klein/2010/02/selling_insurance_across_state.html

    There is no such thing as a free lunch – so some of the relevant questions include who ought to pay (from both a legal and ethical standpoint) and how much government should interfere between buyers and sellers of this type of good (which is admittedly different than many other types of goods).

    The federalism argument against might be the most appealing – but I’d have to think about it more.

  4. An efficient insurance system tends to equalize costs between the fortunate (the healthy in the case of health insurance) and the unfortunate (the sick). Making insurance cheaper for the healthy and more expensive for the sick, or the potentially sick, makes it more like the situation without insurance, ie the one where everyone pays their own health costs. So the situation Klein is describing seems like a step backward to me.

  5. If I have a policy purchased under one State’s regime and visit another State and need to use the insurance, the originating State’s regime dictates my contract terms, even if care is provided elsewhere. This doesn’t seem to bother anybody or have adverse outcomes.

    So, perhaps an acceptable middle ground might be to allow people to purchase policies as if they were residents of the State of their choosing, much as an individual can form a corporation in another State.

    Then, each State can compete in the laboratory with their regulatory regimes, but people/patients can still sign up for as much State ‘protection’ as they feel comfortable with. The States won’t have to give up their powers, but they will have to develop compelling offerings. The only thing the States will have to give up is the power to force their regime on the residents of the geographic area they claim for their jurisdiction, but it’d take a dyed-in-the-wool authoritarian to accept that as a necessary condition for good health policy.

    Federalists could accept this as a way of not centralizing authority.

  6. This is an easy question. All credit card companies now operate out of Delaware or South Dakota because these states repealed all of their usury laws and other banking regulations. The same would happen for health insurance.

    “Buy health insurance across state lines” just means “eliminate all state regulation of health insurance.”

    If you actually want to eliminate state regulation of health insurance, that’s fine, just argue for that directly rather than for de facto repeal.

  7. To answer your question with a question, why am I not allowed to buy into the Canadian healthcare system, or buy insurance from Germany?

  8. Is it currently illegal for states to do this on their own? For example, could the Republican supermajority government of Arizona pass a law stating that they are getting rid of their insurance regulations and instead willbe copying and pasting the Mississippi insurance regulations (or any other state) instead, where the regulations for what should be covered by health insurance are laxer? I see no reason why Republican states can’t basically do this on their own. I think it is a huge “tell”, that Republicans really shy away from Federalist fixes for this stuff, and try to do the federal mandates (aka “shove big gubmint down our throats”) stuff instead.
    On a related note, where I think the same Republican hypocrisy is displayed, you realize that the whole Republican demand for “tort reform” is basically their desire for federal mandate to overrule the sovereignty of state courts.
    John McCain went into the big Health Care “summit” last year, and his entire presentation was about how we really needed (federally mandated) Tort Reform instead of Democratic Federal mandates, which he whined were “unpopular”. McCain used Texas as an example of how awesome tort reform is, instead of his home state, and there was a good reason for that. I saw McCain and Jon Kyl at a townhall in Prescott AZ after that. I asked them both a question along the lines of the following:
    I mentioned that in Arizona, Tort reform is “unconstitutional” because the State Constitution forbids any cap on punitive damages resulting from injury and death, and that Republicans have tried to change this 3 times via ballot measure (the last being only a few years ago), and it has failed all 3 times. Therefore, by the metrics McCain and Kyl were using during the Health Care debate (i.e. polling), their prized “tort reform” is unpopular. I then asked why they were (mimicking the Republican line) “trying to shove down our throats” federally mandated tort reform that is not only unconstitutional under the laws of their own state, but has time and time again failed to muster popularity with the majority of voters?
    Kyl took the question, where he then tried to bust out some of his patented Kyl doublespeak, claiming that the Arizona Constitution didn’t forbid damage caps, it was just that we needed to make a few teeny tiny edits to the AZ Constitution for it to be legal (???!?). He then said in his perfect world, states would do this on their own, but since they wouldn’t, he was trying to push his preferred policies by Federal mandate, and that he didn’t really feel shamed by that.

  9. You can buy health insurance “across state lines.” Aetna sells insurance everywhere and it’s in Connecticut.

    What you can’t do is buy health insurance that fails to meet the requirements set by your state. And this is an outrage why? Does your state allow you to build your house according to some other state’s building code? Can you live in one state and get your driver’s license from some other state? Can you decide to pay your property taxes to some other state because the rate is lower? What exactly do you have against states rights?

  10. @Bloix: “What exactly do you have against states rights?”: Grover obviously takes the same perspective as most libertarian true-believers – “states’ rights” are only important in standing on the neck of the common people, not corporations.

    1. As opposed to nation’s rights? Not sure if you are saying the last line or if you are imputing it to Cleveland or to libertarians in general, or what, but it seems to me that government closer to the source is generally more responsive. As such, states rights trump federal rights, IMO.

  11. As I said, “it seems to me”, but since you’ve asked, there is the fact that your vote counts more when less are cast. That would be the obvious first argument.

  12. But people know more about the federal government (how many people know the name of their state senator as opposed to their US Senator) and its much easier to follow national politics than it is to follow state politics in US media (a situation which is growing more true as newspaper cutbacks lead to the closure of state capitol bureaus.)

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