Sunday, February 28, 2010

Marsha Blackburn: Allow insurance shopping across state lines.

I want health care reform. I want it because the system we have simply is not sustainable. The trajectory we are on will bankrupt the nation and leave more and more people without health care if something is not done.

I also want it because I want people to be free from being forced to work jobs they hate simply for the insurance. Too many people feel chained to their desk by the insurance their employer provides for them. For many people the most important aspect of a job is not the work they will do or the pay they will earn but the insurance. Your employer should no more provide your health insurance than they should your homeowners or auto insurance. Your employer should no more provide your health insurance than they should your housing or pay you in script that is only redeemable at the company store.

Most importantly, I want health care reform because someone very close to me who I love very dearly cannot get insurance due to having a preexisting condition. I see the anguish this situation causes and the worry and fear of living without coverage and the threat to the health of this good person.

I am not alone in wanting health care reform. I run in Republican, conservative, and libertarian circles and I have yet to meet a single person who does not want health care reform. We differ on what kind of reform we want. The other side wants to take over 17% of the economy and greatly expand government control; this side wants common-sense reform that will use market forces and empower the individual to achieve the same desirable results.

One of the things our side thinks will go a long way toward reforming health care is to allow individuals to purchase insurance across state lines. In this clip from the Blair House Health Care Summit, Representative Marsha Blackburn argues that robust competition will lower insurance cost. She argues that we should empower patients by giving them the ability to buy insurance products that fit their needs. She says people are tired of being forced to buy insurance they don’t want. She says to avoid the premium acceleration of the type we are seeing in California, Californians should be allowed to go to Oregon where they can buy a policy for 25% less. Watch the clip:

In this article, First Step: Allow shopping across state border, which appears in today’s Tennessean, Representative Blackburn further makes the case for empowering patients through expanding markets and increasing completion.

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  1. Are you proposing that the federal government *should* be telling the states what they have to do when it comes to regulation of the insurance industry? That there should be federal control of some of the state's controls?

    I don't know if I ant the state with the weakest regulation or least amount of oversight of the insurance practices to be the state all the insurance companies go to, so they can lower costs and have less protections for their customers, much like the credit card companies and banks do to day.

    And there is some inter-state commerce in the current proposals and bills:

    ----(1) "Let families and businesses buy health insurance across state lines." This is a long-running debate between liberals and conservatives. Currently, states regulate insurers. Liberals feel that's too weak and allows for too much variation, and they want federal regulation of insurers. Conservatives feel that states over-regulate insurers, and they want insurers to be able to cluster in the state with the least regulation and offer policies nationwide, much as credit card companies do today.

    To the surprise and dismay of many liberals, the Senate health-care bill included a compromise with the conservative vision for insurance regulation. The relevant policy is in Section 1333, which allows the formation of interstate compacts. Under this provision, Wyoming, Colorado, Arizona, Utah, and Idaho (for instance) could agree to allow insurers based in any of those states to sell plans in all of them. This prevents a race to the bottom, as Idaho has to be comfortable with Arizona's regulations, and the policies have to have a minimum level of benefits (something that even Rep. Paul Ryan believes), but it's a lot closer to the conservative ideal.----

  2. Robert, I am not proposing the federal government regulations replace state regulation. I am proposing that if someone lives in California and they want to buy insurance from an insurance company regulated by the state or Oregon that they be permitted to do so. Let people choose from among hundreds of insurance products. Competition will lead to lower prices.

  3. Like you, I believe we need some major health insurance reform. I'm not nearly as informed as either you or Robert, but if there were more competition and people could get cheaper health insurance in--say, Idaho--and eventually that insurance company proved to be ineffective, then I'm assuming its policy-holders would search for a better--albeit more expensive--policy from a company in a different state. Isn't that the idea of competition? Customers try to find the best deal--not just in price, but in qualilty.

  4. What I mean by my original comment is: should the federal government's mandate to the state about opening up buying insurance across state's line supersede the individual states insurance laws about buying across state lines? Can a state say: No, we won't allow companies to sell insurance or run their companies that don't meet our standards, or will the Federal government be able to over-ride that restriction? Where do State's Rights fall on this issue?

    Each state may have different standards for the coverage, cost, administration, approval, and so on for insurance. Does the resident state continue to regulate?

    I don't think it's as simple as adding a declarative statement ("Persons shall be allowed to purchase insurance across state lines") or deleting a restriction already in federal law to open up the competitive marketplace across state lines. Health insurance represents a hell of an intersection of very complicated subjects: health care (what treatments for what conditions are allowed), financial services (how much to pay for the treatment, billing practices), insurance services (pre-existing conditions, coverage limits), and legal subjects (malpractice claims, fraud). Cost containment and competition add layers to the complexity.

    Fundamentally, does the government (in any form: city, county, state, federal) have a compelling interest *and* allowance to regulate the insurance industry? Sure, in some ways they have the interest (sick/dying persons who cannot take care of themselves are a burden on the state), and I don't know each state's constitutional allowance.

    Also, presuming the government has a role in overseeing the insurance industry and practices, can they set the *minimum* coverage (what's included in the coverage no matter what plan you get, although the insurance companies are motivated by the market to provide more coverage for more money), across state lines? Or can one state set the absolute lowest possible standard and all the companies flock there (in collusion???) and set up so they can have the least oversight and consumer protection and most corporate protection, a la the credit card and financial institutions now?

    Can one insurance cherry-pick, as it were, the healthiest persons and leave the rest with incredibly high priced coverage, since all the risk, as it were, has now been pooled together, instead of across the population, to lower costs for the majority?

    Any comment, by the way, on my original point: that there is *already* inclusion of intrastate competition in the Senate bill?

  5. Oops, I meant *inter*-state competition...

  6. Of course the problem with allowing interstate purchases of health insurance is that you have to have some national standard for what legally constitutes a health insurance policy.

    Think Alabama can do that by itself?

    You may want health care reform, but I seem to recall GOP leaders like Tom Coburn and Mitch McConnell questioning whether expanded coverage is even a realistic goal. Eric Cantor said "we can't afford it right now" and even John Boehner's reform plan only expands coverage by a mere 3 million people.

    Republicans love to TALK about health reform, as long as nobody changes the present system.

    Sense the irony?

  7. Anonymous, I do think Alabama can do that all by itself.

  8. I think Anon was saying, can/should one state set a national standard?

    I think your response may indicate that you don't support national standards for insurance?

  9. You are right. Just as I do not think we should have only one kind of house or one brand of grocery store or one employer or one make of car, I think people should be allowed to choose the type of insurance product they want. Some people may want only catastrophic coverage (which is what insurance used to be)other may want full unlimited coverage with no co-pay. One size does not fit all.

  10. So the states would be able to continue to regulate the insurance companies and their coverage and business, i.e., standards, just as they regulate safety and building codes for houses and structures, and food storage standards and truth-in-labeling and advertising laws.

    In the bigger principle, we are talking about contract law. The contract the insurance provider has with you. Do you believe that the government should have the authority to regulate contracts in any way between parties?

    If yes, you do believe that the government has some authority to regulate contracts in some way, what is the scope of that authority? What areas and responsibilities does the government have in oversight and regulation in insurance contracts for health services?

    I believe quite bluntly that the majority of persons in America are not prepared or able to handle a completely free market, i.e., caveat emptor. The majority of persons are trying to keep their heads above water, finacially speaking, as well as have a life outside of researching every single transaction they have in life in regards to business *before* they make it, and then staying current on every field in which they have a transaction *in progress*, over every aspect of those transactions, so that they would be able to be completely free and informed to make their decisions about what/when/where/who from/how often/ to buy/sell/transact business.

    There has to be some independent, above-consumer oversight from an authority. And our democratic republic capitalisitc system we live in says: sometimes that is the government's role. And voting is how we express our "buyer's privelege" as it were, how we voice our preference in what we want out of the regulation.

    However, as some have pointed out, once people realize they can vote themselves money or power, they will do so and destroy the we have 3 branches of government...the legislators to make law, the administration to enforce laws, and the court system to judge the law and its execution against the standard: The Constitution and precedent. And the judges are independent in many ways from the voting public. So they retain power outside of elections, for the most part, to be one key independent factor in preventing wide-spread abuse of the election process in only serving the majority.

    /ramble mode off into a groove there.