I have a problem with characterizing any cross-border economic activity as "100% free-market". Marketarian as it may be on this side of the border, on the Mexican side there are so many subsidies of basic living costs (corn meal and gasoline, to name two) that hold down wages, that the entire border economy, the maquiladora phenomenon (now admittedly passe'), and outsourcing to Mexico in general are all tied up with lower Mexican wage/living costs and Mexico's subsidized economy, and are therefore a huge arbitrage play, playing off differences in wage/price structures in two substantially different economies and cultures.
I actually seem to think there just maybe one are two federal laws against such things. But the insurance excuse is hog wash anyway.
What you posted is a legitimate criticism of the proposal IMO. In fact, the logic you use is largely the reason why the plan ultimately was aborted.
Once again, however, this was not a nefarious plan for Perry to funnel Texas dollars to Mexico. Most Washington liberals aren't even bold to try something like that, let alone a right wing Texas Governor.