Skip to comments.Vanity - "Fixing" Health Care. Why is it Wrong to Sell "Inter-state" Insurance?
Posted on 07/01/2012 6:42:16 AM PDT by jonno
In all the discussion about repealing Obamacare, I haven't seen a lot of discussion about what will fill the solution vacuum once it is defeated.
One issue that keeps coming up is the prohibition against insurance companies selling policies across state lines. Given that increased competition - coupled with availability - generally drives down cost, why is removing this restriction not a first and foremost low-cost solution? Or if this is indeed problem, where are the pitfalls?
Here in Maine, we have many “shall cover” requirements that have driven all but a few insurers out of the market. Allowing people to purchase ‘a la carte’ coverage, and set up a national pool for covering the rest at a premium price works for me. Why should we all have to pay for AIDS coverage for the sodomites?
Once you see this clearly, the activity in Washington becomes much more understandable.
Imagine that. The interstate commerce clause has been used to restrain and control insurance companies, even though those same companies are prohibited from engaging in interstate commerce.
It’s not wrong, it’s simply illegal. Making it legal, and tort reform would go a long way toward reducing health insurance cost, and improving it, as well.
I would offer this analysis. The limit of inter-state insurance...makes as much sense as limiting the production and sale of orange juice...to only the state that grows the oranges. The same logic would work for states with natural gas....they should only be able to sell their natural gas within that state.
I agree. No other explanation for the current mess.
So you end up with CA rules (most strict) and higher costs for the customer.
Same as what has happened with petroleum products a different blend for some states and higher overall costs.
I agree. No other explanation for the current mess.
NOthing! Just repeal the whole damn thing and start over. RIGHT NOW, people HAVE healthcare. The "poor" have healthcare, the indigent. THERE IS NO CRISIS! Don't do it piecemeal, repeal the whole evil law.
The only real reason states do not allow selling insurance across state lines is that they benefit by taking in surcharges and permits and the like on what they control. Many states have only two or three insurance companies licensed to sell insurance in their states. But there is a strong argument that the barriers should come down, thereby expanding choice, increasing competition, lowering cost (and thus covering more people), and also enabling people who move to take their insurance with them more easily . . . but that involves other issues. If they would allow small businesses, including those who have only a handful of employees, to pool together to form groups, then that, too would increase coverage for those without. Almost everyone would then have access. Since group insurance cannot discriminate against those with pre-existing conditions, it takes care of that problem for most people, too. And since insurance companies would benefit from all this, Congress, as a trade-off, could simply ban them form engaging in such discrimination even for those purchasing individual coverage. The Republicans tried to pass this group approach some years ago and the Dems blocked it, because what they want is European-style socialized medicine, with everyone beholden to the IRS.
As in all economic paradoxes you must follow the money. The answer is usually rooted in how does it benefit politician for things to stay as they are.
The State of Ohio has an insurance commission. Ohio Department of Insurance
It is their job to make sure that the companies that insure citizens in the state of Ohio are solvent and can pay the claims of their customers. They also regulate the insurance companies in other respects.
Naturally if there is a commission regulating a profit making enterprise there are political palms to be greased by lobbyist representing that industry.
Not to say that there is bribery going on here but state politicians need campaign funds just like national politicians.
That’s how Congress has always controlled the state and business.
For example, the 2nd Amendment is universal, but one state's conceal carry permit isn't necessarily accepted across state lines, or same sex marriage is legal in some states, but not recognized in all.
Plus, states might be protecting their state's business as well as their citizens, from unfair competition.
Not all insurance companies are national or international companies, so you have to take what one company sold you to another company and force them to give you the same deal as the first?
Would that be like transferring a home loan from the house you sold in one state to the house you just bought in another?
Or more like carrying a credit card everywhere you go?
Making it an interstate market means slapping aside all the insurance laws in every state and replacing it with a federal marketplace.
Has anything ever been improved by congressional and executive regulation? No. It's always been made worse, and the costs have always increased as a result of it. If you are above the Arctic circle, you might find it very helpful to have a requirement in your plan that might cover light therapy. That's important for Alaska. How many in the other 49..err, 56 states would need that coverage in their plans? None?
Moreso, the federal government NEEDS this interstate marketplace to make ObamaTaxCare work. They need to be able to monkey around with everything so they can exempt their friends and punish their enemies. If the insurance boards of the 50 states can wipe aside their regulations, then they loose their sticks and their carrots.
Finally, let's be honest. Health HMO insurance is the number one reason why healthcare costs continue to spiral out of control. The cost of health care is hidden from the consumer, it requires armies of form processors to handle filings for reimbursement, and puts dozens of people between the consumer and their doctors. It is the worst solution to health care, and by making a national market for it and regulating it on the federal level, it will simply make things even worse.
It will lower costs and lower costs is seen as a dilution of Federal power over the People.
To do it now might delay the ultimate goal of consolidating the power in the Federal
THAT is the problem. They DO NOT want cost to go down. If it did, they would not have been able to ram this barrycare up our collective a$$'s.
If an interstate entity can compel the purchase of it, I should think some sort of case can be made regarding the legality of the restriction.
It is appently possible to get waivers in certain conditions that can allow multi-state companies to pick a state in which they do business to obtain group insurance for the entire company. My daughter was insured by BC/BS of Alabama while she worked in South Dakota. It would make total sense to drop this federal restriction for selling insurance across state lines for all employers and individuals. One of the consequences of Obamacare is that small population states that currently have only a few health insurance providers will have those health insurance companies leave as costs become too high and there are too few policy holders in the state to spread the increased risk.
The problem isn’t a vacuum, the problem is interference.
The government has absolutely no business regulating healthcare at all, none.
Get out and watch the free market take over.
Every “big problem” in healthcare is the result of government action.
Romney should promise an Executive Order waiver to every man, woman, child, and business in the United States.
“The folks at the top don’t want a solution.”
Could you please take a moment and figure out who “the folks” are?
The insurance company lobby doesn’t want the competition and lower profits.
The liberals want the destruction of our Constitutional Republic.
They are NOT the same people with the same agenda.
It just so happens that some level of self interest, in protecting markets, has the effect of providing fodder for the socialists call for “government solutions”.
Call me naive, but in this discussion I don’t see why Health ins should be any different from auto or home ins.
Cases in point:
- in the last 4 years the roof our house has been totaled by hail. So, I call our ins, they send out an adjuster, I get a check in the mail for 1/2 or 2/3rds the amount. With the money, I shop for the best roofing deal I can get. Once the work is complete, I send in receipts - they send me another check for the difference.
- My car gets a ding. My ins. cuts me a check. I find a shop that will do the work to my satisfaction for 2/3rds the cost.
- The birth of my last child cost my ins. ~10K. The delivery was uneventful, my wife is home on the 3rd day.
- It seems I hear about a half-dozen time a week how Geico can save me 15% in 15 minutes.
- I don’t know of if lasik eye surgery is covered by any ins., but it seems to me that I could shop around and get it done for ~$1500 an eye.
Both my home and auto insurance companies are nation-wide carriers.
It seems reasonable to me that I could provide proof to my insurance company as to my wifes pregnancy, get a percentage up front, and then get the balance upon completion of “the work”. You can’t tell me that if we shopped around we couldn’t find a Dr/mid-wife who could provide “reasonable” care delivery a child for less than $10k.
I’ve got a skin “condition” that should probably looked at. It seems reasonable that I should be able to get an “estimate” and work with my carrier to get the work done as cheaply as I am able.
Sorry to ramble - in a time crunch this PM...
What I've learned is, most medical care is remarkably inexpensive, even more so with discounts mandated here when you self pay instead of having insurance.
I see it like any other expense now, just like in the old days before Kennedy's HMOs became so popular, and budget accordingly.
The only health insurance I want is something to cover radically expensive health emergencies and accidents.
Otherwise, it's such an expensive luxury they way people are trying to set it up now, to be able to go anytime for any reason and have it be free. What business could survive with that model?
I wish my favorite restaurants would give me that kind of a deal.
Your post #3 makes sense.
Too many chickens don’t want to fight for the U.S.A.
And mind, your auto insurance doesn't cover oil changes, replace your tires or give it a wash once a month.
But with HMOs, the ‘holy grail’ has always been zero cost to the consumer at the service side. We dance around with copays and whatnot, but that's been the ultimate goal (and unions have been finding that this ultimate goal isn't sitting well with folks.)
If health insurance was back on the table, where you make claims, determine where your care is given, etc - we'd be well on the road to recovery, as the veil between the consumer and the cost of services would be wiped away. Go ahead, go in to your local hospital and ask how much the basic fees are - per hour of emergency room time, per day fee for a semi-private room. Every other business on the planet has to provide a price list on demand, yet hospitals are exempt. How much is the test going to run? Wait until you get the bill to find out.
Consumer involvement would eliminate a lot of the fat from the system.
Most health insurance payouts are for general maintenance that shoul be paid out of pocket. If car insurance was forced to cover every expense of owning a car, no one could afford it.
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