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Health Insurance and the Commerce Clause
Writing in today's Wall Street Journal, Judge Andrew Napolitano argues that Congress should use its authority under the Commerce Clause for a legitimate purpose and allow the interstate sale of health insurance:
The same Congress that wants to tell family farmers what to grow in their backyards has declined "to keep regular" the commercial sale of insurance policies. It has permitted all 50 states to erect the type of barriers that the Commerce Clause was written precisely to tear down. Insurers are barred from selling policies to people in another state.
That's right: Congress refuses to keep commerce regular when the commercial activity is the sale of insurance, but claims it can regulate the removal of a person's appendix because that constitutes interstate commerce.
Dan|9.15.09 @ 2:43PM|#
Firrrrst!
Oh yeah. That worked so effing awesomely for credit cards. Who will
be the Delaware of bait-and-switch health insurance contracts?
Alabama maybe? Or Connecticut?
It's so wonderful to crap on federalism and state sovereignty when
it serves the interests of the GOP donor base.
|9.15.09 @ 2:49PM|#
Nicely done, Judge. At first blush, the kind of barriers to interstate commerce erected by the states around health insurance are exactly the kind of thing that the Commerce Clause was intended for.
|9.15.09 @ 3:00PM|#
What exactly is the states' rationale for barring insurers from
competing across state lines?
Anyone?
|9.15.09 @ 3:02PM|#
The same Congress that wants to tell family farmers what to
grow in their backyards has declined "to keep regular" the
commercial sale of insurance policies. It has permitted all 50
states to erect the type of barriers that the Commerce Clause was
written precisely to tear down. Insurers are barred from selling
policies to people in another state.
Leave it to a bunch of Ivy league fucks to get the commerce clause
100% wrong. Why should I respect anything these cocksuckers have to
say other than they control the leashes of the dogs that would do
me harm?
|9.15.09 @ 3:03PM|#
This issue has still confused me, so bear with me. I'm in
California... is there a state law that says that I am not allowed
to buy insurance from an out of state provider? What is the
specific rule about this?
I ask because I see a lot of references to this, but I still don't
actually know the mechanics. So let's say I tried to buy a policy
from a company in Utah. If they sold me a policy, what state law
would they be violating? Utah's? California's? Or is the violation
at the time of reimbursement? If I send them a bill from my doctor,
would they be allowed to pay a portion of it?
If anyone can point me to some specifics on this, I would
appreciate it.
|9.15.09 @ 3:06PM|#
"What exactly is the states' rationale for barring insurers from
competing across state lines?
Anyone?"
Power.
Dan|9.15.09 @ 3:10PM|#
The insurers don't want the simple prerogative of selling across
state lines.
The insurers want to set up shop in a low-regulation state, then
sell to the other states without having to comply with the laws of
those other states.
So if, say, Vermont requires insurers to pay for an overnight after
giving birth but Alabama does not, then insurers want to
incorporate in Alabama and sell policies in Vermont that do not
cover the maternity overnight.
Imagine if you could disobey the speed limits in one state by
wearing the license plates of a different state, and you have an
idea of what the insurers are trying to get for themselves.
Clay Barham|9.15.09 @ 3:15PM|#
The Changing Face of Democrats describes the switch from Jefferson-Jackson views to those of Rousseau-Marx for the Democratic Party. Find it on www.claysamerica.com or www.amazon.com under Clay Barham books.
|9.15.09 @ 3:18PM|#
Imagine if you could disobey the speed limits in one state
by wearing the license plates of a different state, and you have an
idea of what the insurers are trying to get for
themselves.
Only if you are capable of convincing yourself that a public good
such as speeding laws has any relation to a private good such as
health insurance.
Dan|9.15.09 @ 3:23PM|#
Nothing is without externalities, MikeP. If an overnight
maternity stay incrementally helps the newborn be healthy and safe
-- a reasonable judgment even for lay voters to make -- then the
child, and society as a whole, benefits and voters can make a
democratic political choice accordingly. There is no excuse for
undermining that choice with a commerce-clause reach-around.
(...or else just shut your maggot-hole about federalism,
permanantly and forever, but that won't happen).
|9.15.09 @ 3:32PM|#
What exactly is the states' rationale for barring insurers from competing across state lines?
Can't answer that, but the Federal law that imposes it is the
McCarran-Ferguson Act.
Up until
1944, insurance was not considered "commerce" and not subject to
federal regulation. But in United States v. South-Eastern
Underwriters Association, the Supreme Court held that Congress
could regulate insurance transactions that were truly interstate.
Congress then enacted the McCarran-Ferguson Act (15 U.S.C. ยง 1011)
which provided that the laws of the several states should control
the insurance business, but that the Sherman Act, the Clayton Act,
and the Federal Trade Commission Act were applicable to the
insurance business to the extent that it wasunregulated by state
law.
Keep in mind that insurance companies that sell policies in your
state may be headquartered elsewhere but must jump through certain
state hoops to sell in your state.
|9.15.09 @ 3:34PM|#
Dan,
The benefit to the parents and the child themselves so far outweigh
the benefit to society as to make the latter's concerns patently
irrelevant.
There is every excuse to prevent states' abrogating the inalienable
right of the actually affected individuals to buy whatever
insurance they damn well please.
db|9.15.09 @ 3:34PM|#
Dan:
Please explain your reasoning behind denying choice in more
affordable coverage to those who wish to pay only for what they
want. If a woman wants her insurance company to cover an extra
night's stay, why shouldn't she be willing to pay a marginal
increase in premium for it?
Dan|9.15.09 @ 3:43PM|#
MikeP, db:
Don't dodge the process-based argument at issue. The federal
government could destroy the state laws by making it a race to the
bottom, with the lowest state regulators controlling for everybody,
which is what you want, and what the credit card industry already
has ( -- great how that turned out in real life).
Or, by the very same mechanism of the commerce clause, the federal
government could do the opposite, and impose high regulations on
all insurance coverage.
Why not let the people of each state make their own choice at the
ballot box, and the best state programs will succeed, while the
worst state programs will fail?
If low-regulation is so damned awesome, why not let the good voters
of State X figure out that they should emulate the low-regulation
policies of State Y?
Don't trust democracy anymore?
Want Washington DC overriding every state government on the best
way to regulate insurance?
Well, of course you don't ...
... except when you do!!!
Will|9.15.09 @ 3:45PM|#
Uh, Dan - you're missing the point. If you value these benefits and are willing to pay for them, you can buy a policy that provides them. If I don't place the same value on them, or are unwilling or unable to pay for them, I should be able to buy a different policy. Why do you find it necessary for the majority to impose its values on everyone through the political process?
|9.15.09 @ 3:51PM|#
Why not let the people of each state make their own choice
at the ballot box, and the best state
programs will succeed, while the worst state programs
will fail?
Boy, that took some editing to fix.
Without that editing, it sounded like you were consigning tens of
millions of your fellow countrymen to the ash heap of forced poor
choices on something as critically important as health care. I know
you didn't mean to.
Don't trust democracy anymore?
Anymore? I never trust democracy when it comes to private
decisions.
Where do you think you are posting?
tarran|9.15.09 @ 3:53PM|#
Dan,
I want to introduce a concept you seem unfamiliar with:
A rider
to an insurance policy.
|9.15.09 @ 3:55PM|#
Sandman,
Most states require a company to be licensed with the state
insurance regulator before selling insurance in that state. So, you
can't buy insurance from a Utah-licensed insurance company (that is
not also a California-licensed company) because they won't sell it
to you, because they don't want to get fined by California for
selling insurance illegally in California. Most national insurance
companies have a subsidiary for each state in which they do
business.
Dan|9.15.09 @ 3:58PM|#
Will, MikeP, db --
If your arguments are so flawless, make them to your
representatives and your fellow citizens, and persuade them to
enact such laws in your state. Let the citizens of other states do
likewise.
If you think (-- and I guess your really are stupid enough to think
this --) that insurance companies are going to offer cheaper
insurance if allowed to skimp on benefits and that such
dearly-obtained cheapness is to the indisputable benefit of the
consumer (but are you really that stupid?) then have congress enact
a real law authorizing doing business that way.
But please, enough of this charade that the commerce clause was
designed to force a race to the bottom in every sector of the
economy. You're not fooling me, and you won't fool anybody else
with a lick of sense.
|9.15.09 @ 4:04PM|#
But please, enough of this charade that the commerce clause
was designed to force a race to the bottom in every sector of the
economy.
Yes, because every other sector of the economy aside from the state
regulated sectors of alcohol and guns is a total and utter
disastrous race to the bottom where consumers never get anything
they want.
You're not fooling me, and you won't fool anybody else with a
lick of sense.
Nobody every buys anything from another state. Check.
|9.15.09 @ 4:10PM|#
Sandman,
Most states require a company to be licensed with the state
insurance regulator before selling insurance in that
state.
I'm no insurance regulation expert, so caveat this, but
typically:
Its not just that they are licensed, its that they have to show
that their operations in that state are financially sound. Among
other things, this means that you're not allowed, as I understand
it, to assemble risk-sharing groups across state
lines/jurisdictions.
Dan|9.15.09 @ 4:14PM|#
MikeP --
You must have a PhD in irrelevant digressions.
You want to get the regulatory regime you deem best, by any means
necessary, process be damned, but you lack the guts or the facility
with language, or both, to say so.
You would scream and holler if the same federal legislative
mechanisms were used to impose high regs on a low reg state, but
you have no sense of reciprocity or fair play to inhibit committing
the same sin in the opposite direction.
Enjoy the little world you made for yourself inside your head. It
is much easier than the real one.
creech|9.15.09 @ 4:20PM|#
In Pennsylvania, the Blue Cross in central Pa. is prohibited by state law from selling its policy in Eastern Pa. I don't know which party passed this anti-competitive law but I do know it survived the Republican Tom Ridge administration which was concurrent with Republican control of both houses of the state legislature. Gee, I wonder what one would find it one were to "follow the money?"
|9.15.09 @ 4:20PM|#
RC Dean-
Yes, licensing comes with a number of conditions. Some involve
safety and soundness (financially strong enough to pay claims, not
taking on too risky investments, capital ratios, etc.) and some
involve what has to be in the insurance policies themselves, how
they're marketed and a whole host of other rules.
|9.15.09 @ 4:29PM|#
You would scream and holler if the same federal legislative
mechanisms were used to impose high regs on a low reg state, but
you have no sense of reciprocity or fair play to inhibit committing
the same sin in the opposite direction.
Of course I would. Government abrogation of the right of contract
overreaches the legitimate authority of government whether it is
done at the federal or state level. Why should I not fight it at
both levels?
But, in particular, the interstate commerce clause was included in
the Constitution to prevent exactly this sort of protectionism
between states. That it is not only appreciated, but enforced, by
the federal government is a massive win for insurance and
government special interests and a huge, huge loss for the populace
as a whole.
|9.15.09 @ 4:35PM|#
I certainly do wish that some parents would control their children's internet use better.
tarran|9.15.09 @ 4:38PM|#
Dan,
My business has insurance companies as clients, and I am intimately
aware of what they are worried about and how they operate.
Mike P is right, and it is you who is detached from reality.
Within each state, and within the limited areas they are allowed to
compete within each state, there is a cutthroat competition to
maintain better apparent service.
The arrangment of state markets reduces competitive pressure and
the barriers for entry ensure that crappy companies can stay in
business for a long time.
However, whenever the degree of regulation is reduced, and
insurance companies are given greater latitude in what they offer,
immediately they start seeking out niches where they can be the top
provider.
The only race to the bottom is razor thin profit margins and a
desperate attempt to keep people from badmouthing the company. Some
companies seek to cut spending by not paying out claims, hoping to
offer generous settlements that include a gag order on the few
lawsuits it generates. Other companies, like Aflac, go crazy trying
to make sure that all claims are paid within three days.
Interestingly, when offered genuine choice, consumers tend to
purchase insurance from the good guys, and the bad actors
eventually go bankrupt in a welter of scandal.
In the good old days, anyone could start an insurance company. In
theory, 100 people could set up a mutual company that has very low
risk of being bankrupt by a statistically unlikely streak of
significant claims. They don't do so because of the onerous
restrictions that the current state-regulated regime creates.
Insurance is a good like any other. Satisfy consumers in a free
market, and you will be rewarded by profits and increased bsuienss.
D a crappy job, and you will eventually lose all your customers and
be relegated to the dung-heap of history. It is the cartelization
of the insurance industry by the current legal regime that allows
the bad actors to keep screwing over their customers and stay in
business.
Dan|9.15.09 @ 4:42PM|#
"...is a massive win for insurance..."
So why is the insurance industry trying to undo it?
***********
N.B.: There is no such thing as a substantive "right of contract."
You're talking nonsense, and falling into the trap of empty-headed
"rights discourse."
State action is required to enforce contracts, and the state can,
as a matter of prioritizing the use of scarce public resources, say
which types and categories of bargains will and will not be
enforced; and it can do so with an eye on consumer protection,
however paternalistic, counter-productive, and ill-considered the
wall-eyed Objectivist snot-sniffers may feel that such protections
are. You don't have a right -- moral, constitutional, or natural --
to the most "efficient" contract regime as you may see it. Other
considerations are legitimate when the public sets the rules of
government action. The public may suspect that insurance companies
will, even with an undesired mandate, offer coverage at the same
price as without the mandate. Even if the public is actually wrong,
no fundamental rights are being violated when it votes accordingly
and makes some baseline rules about the substantive terms of an
insurance policy.
Dan|9.15.09 @ 4:47PM|#
tarran --
You are a pencil-necked, bird-chested community college loser who
lives in your mom's basement, picking your nose while you sit at
the keyboard wasting bandwidth and oxygen. You make up a bunch of
bullsh!t about your keen and first-hand insights to the health
insurance industry. You don't know jack, and you are beneath
belief, or even notice. You probably deliver chinese food on a
bicycle.
But even if I am mistaken on that count, see 4:42 pm.
|9.15.09 @ 4:51PM|#
So why is the insurance industry trying to undo
it?
Got any evidence to offer on this?
|9.15.09 @ 4:51PM|#
You would scream and holler if the same federal legislative
mechanisms were used to impose high regs on a low reg state, but
you have no sense of reciprocity or fair play to inhibit committing
the same sin in the opposite direction.
By the way, could you explain how this logic of yours works with
Jim Crow laws?
|9.15.09 @ 4:54PM|#
So why is the insurance industry trying to undo it?
Wait, the insurance industry is trying to undo
McCarran-Ferguson?
This is news to me.
Tricky Prickears|9.15.09 @ 4:54PM|#
This is just getting silly now. Each state has the right to
regulate all insurance sold to its residents. If the individual
states are stripped of that power, then the federal government will
be responsible for all insurance regulations. Is
that really what we want?
This is just some asshole move to get around state regulation. If
an individual state sees fit to relax regulation in a specific
area, great.
In NJ State Farm really fucked up an already fucked up auto
insurance market, and Christine Todd Whitman threatened to throw
them the fuck out of NJ. It was easing of regulation that allowed
companies like Geico and Progressive to come in and provide
competition and stabilize the market. As far as I'm concerned, the
federal government has no business coming into NJ, or any other
state, and telling them how to regulate their insurance
markets.
But that's just my humble opinion.
Dan|9.15.09 @ 4:58PM|#
Now we get to the nub of it. MikeP thinks todays insurance regs
are as evil as Jim Crow, and the right to buy low-reg insurance is
as fundamental as the rights given to African-Americans under the
Civil War amendments.
Way to go.
tarran|9.15.09 @ 5:05PM|#
You are a pencil-necked, bird-chested community college loser who lives in your mom's basement,
Wow, every one of those assertions is wrong!
You make up a bunch of bullsh!t about your keen and first-hand insights to the health insurance industry.
Actually, my clients are commercial property insurers.
Nice try though. And by the way, if what I said was a
bunch of made up bullshit, then they wouldn't be paying me for my
services: they hire me to standardize the reports that go to
underwriters so they can make underwriting decisions more quickly
and accurately - i.e. not accidentally insuring properties they
don't want to cover and missing out on properties that are good
risks.
As to your little tirade at 4:42, I don't see how the failure of a
socialist monopoly (government supplied courts) in any way
falsifies the notion that the provision of insurance is subject to
the same competitive pressures that affects any other service
provided on the free market.
I do like your crack about objectivists though. The way they
worship the state sickens me.
|9.15.09 @ 5:06PM|#
Dan,
Analogy of kind is not necessarily analogy of degree.
Care to answer the question?
Dan|9.15.09 @ 5:09PM|#
MikeP --
You get a constitutional amendment passed saying that "the right to
contract health insurance shall not be infringed," and I'll be fine
with a federal teardown of state insurance regs.
Until then...
The Angry Optimist|9.15.09 @ 5:15PM|#
I do like your crack about objectivists though. The way they worship the state sickens me.
Oh christ, we're some of your best and most logically-consistent
and ardent advocates, you fucker. If you're going to shoot
something in the foot, don't make it your own allies.
tarran|9.15.09 @ 5:16PM|#
The funny thing is that Jim Crow laws were a product of the
government by democracy that Dan seems to be such a big fan
of.
And note that Jim Crow laws were designed to prevent the
improvement in economic and social status blacks inevitably enjoyed
under a free market; the very free market that Dan decries as
causing a "race to the bottom".
Dan|9.15.09 @ 5:16PM|#
Yes, exactly MikeP. The clear and unmistakable implication of my
statement is that slavery was okay. There is, of course, no other
reasonable way to interpret it.
You are a bag of hammers.
The Angry Optimist|9.15.09 @ 5:17PM|#
Dan exists in a tautological world, where rights only exist if
the government enforces them, and because the government sets
priorities on what rights get enforced, it can therefore define
them out of existence.
Not quite, Dan - you do realize that people exercise their rights
without government backing every day, don't you? Or do you think
the Jesus-screamer on the street corner has a city permit?
|9.15.09 @ 5:23PM|#
No, Dan.
The clear and unmistakable implication of your statement is that
rights are decided by political process with no normative
consideration.
|9.15.09 @ 5:24PM|#
Anyway, to get back to the point...
So why is the insurance industry trying to undo it?
Got any evidence to offer on this?
tarran|9.15.09 @ 5:26PM|#
TAO,
I'm not shooting anyone in the foot.
And given the Objectivist tradition of officially renouncing
old-friends or acquaintances for the "anti-life" crime wandering
off the true path of Randian purity, I find your comment pretty
funny.
Dan|9.15.09 @ 5:32PM|#
Mike and Optimist have followed the libertarian dogma right into
its logical cul-de-sac: unlimited affirmative rights to enforcement
of contract.
Two people can form a contract on anything, ANYTHING, and the
government's only choice is to enforce same by its terms, however
inequitable or inefficient or unworthy the public may deem it. When
the government says "'contract X' is not a legitimate contract, and
won't be upheld by law" it denies freedom.
The government and its resources, the taxpayer dollars, have to be
used to enforce that contract, and the voters cannot deem it
inimical to public policy, however heinous and arbitrary the use of
a bargaining-power differential may be.
Let us hope and pray they and their creed forever remain as
desparate and lonely as they are today.
The Angry Optimist|9.15.09 @ 5:33PM|#
oh good, tarran, so what you're doing, basically, is taking the
worst exaggerations and proclivities of some and broad-brush
painting the rest of us with it.
wow, cool, can I be collectivist too?
The Angry Optimist|9.15.09 @ 5:36PM|#
Dan - I see a lot of weasel-words in your last little screed,
with very little substance.
For example, how different must bargaining power be before it
becomes a "heinous" use thereof? When I bargain with Microsoft for
a copy of Windows, for example, I would say you'd be hard-pressed
to find a more out-of-whack "bargaining power" differential,
wouldn't you? And yet, Microsoft doesn't charge me 1000 dollars a
copy. Why is that, do you think?
Dan|9.15.09 @ 5:38PM|#
Oh shoot! Angry Optimist cops to being a Randian! That takes a
pair of eggs for sure.
The New Republic has a great recent book review on Rand and her
cronies. I wonder if Angry Optimist would have serviced Rand like
Nathaniel Branden had to?
|9.15.09 @ 5:51PM|#
I just don't see what's so horrific about letting insurers offer whatever plans they like and letting people decide which plan they want. This strikes me as hard to argue against.
Dan|9.15.09 @ 5:56PM|#
No "weasel-words." I'm content to leave it up to the voters
which insurance contracts they will and will not spend their
hard-earned tax dollars enforcing.
Not everything boils down to fundamental rights. The voters might
cut off a reasonable insurance contract, or they might allow an
unreasonable basis for denial of coverage. Either way, It's not the
same thing as slavery or censorship or a warrantless house search.
On some things, the voting public has the prerogative of screwing
things up for the rest of us. That's the imperfect system we have,
and it is often better to give it 50 separate runs at the state
level than one big run at the national level.
|9.15.09 @ 5:59PM|#
Two people can form a contract on anything, ANYTHING, and
the government's only choice is to enforce same by its terms,
however inequitable or inefficient or unworthy the public may deem
it.
When, pray tell, did I imply that the right to contract meant the
right to have that contract enforced by the state?
When the government says "'contract X' is not a legitimate
contract, and won't be upheld by law" it denies freedom.
No it doesn't. No one has the right to make someone else enforce
their contract for them.
You really don't understand rights, do you.
Dan|9.15.09 @ 6:02PM|#
What is MikeP suggesting? Self-help enforcement of contracts? Bring your own gun?
|9.15.09 @ 6:05PM|#
I am suggesting that the insurance contract can arrange for the insurer's home state to be where contract disputes are heard. Your own state doesn't need to enforce the contract.
|9.15.09 @ 6:05PM|#
And if no state will enforce the contract, you are free not to
buy from that insurer.
Duh.
The Angry Optimist|9.15.09 @ 6:07PM|#
oh I see, Dan is a complete and total mishmash of illogic and
screaming.
poor widdle feller.
Dan|9.15.09 @ 6:10PM|#
Oh, so now MikeP is going to repeal the Full Faith and Credit
Clause?
My state won't have to enforce the originating state's decision
against my state's policyholder?
Tricky Prickears|9.15.09 @ 6:12PM|#
No it doesn't. No one has the right to make someone else
enforce their contract for them.
What exactly is The Seventh Amendment?
In suits at common law, where the value in controversy shall
exceed twenty dollars, the right of trial by jury shall be
preserved, and no fact tried by a jury, shall be otherwise
re-examined in any court of the United States, than according to
the rules of the common law.
|9.15.09 @ 6:14PM|#
My state won't have to enforce the originating state's
decision against my state's policyholder?
Why not? That enforcement now becomes an interstate matter and, as
you note, the full faith and credit clause applies.
Are there raging civil wars over Microsoft's Windows XP Pro
EULA?
17. APPLICABLE LAW. If you acquired this Product in the United States, this EULA is governed by the laws of the State of Washington. If you acquired this Product in Canada, unless expressly prohibited by local law, this EULA is governed by the laws in force in the Province of Ontario, Canada; and, in respect of any dispute which may arise hereunder, you consent to the jurisdiction of the federal and provincial courts sitting in Toronto, Ontario. If this Product was acquired outside the United States, then local law may apply.
This is done all the time!
|9.15.09 @ 6:15PM|#
The Seventh Amendment guarantees that your case won't be thrown out of court as unenforceable?
Dan|9.15.09 @ 6:23PM|#
So, basically, MikeP never had a point. He just likes pissing up
a rope.
Your state does not have to enforce the contract... until it has to
enforce the contract!!! Hahahahahahahahahahahahahahaha!
Go drown in your own puke.
The Angry Optimist|9.15.09 @ 6:23PM|#
What is MikeP suggesting? Self-help enforcement of contracts? Bring your own gun?
Now, let's think about this - if the majority of society decided
"Any contract for food Dan makes is invalid as a matter of public
policy, and will therefore not be enforced", are you really going
to stand idly by while you starve to death?
Just curious. Again, Dan, you are positing a tautology: anything
society enforces is a right, anything it doesn't, isn't, and that
is completely monstrous. To Godwin the thread, it's shit like that
that leads to the Holocaust.
|9.15.09 @ 6:26PM|#
Your state does not have to enforce the contract... until it
has to enforce the contract!!!
No, it does not have to enforce the contract. It has to enforce the
judgment.
Could you please buy a better sig generator? The one you are using
is really scraping the bottom of the barrel.
|9.15.09 @ 6:35PM|#
By the way, I assume from your evasion that the one falsifiable
thing you said...
So why is the insurance industry trying to undo it?
...is false.
tarran|9.15.09 @ 6:54PM|#
MikeP, that's seems to be pretty much par for the course with
this guy.
Sigh.
Of course, I should point out that there are numerous insurance
companies. Many if not most of them are led by officers who are
experts in corporatism and the use of big government/big business
alliances to ensure nice revenue streams.
It's not inconceivable that some of these companies are lobbying
for having the Feds regulate (and cartelize) the industry, hoping
to cash in on the changed regulatory regime.
In the end, though, there are many insurance companies that like
things the way they are now with states preserving their revenue
streams and allowing them the freedom to screw over their customers
with little risk of sanction.
One of the drivers of state regulation was the fact that the courts
had ruled that insurance companies were subject to
anti-trust scrutiny. By having the states regulate the industry,
the insurance companies could escape scrutiny by anti-trust
lawyers.
The idea that the regulations that make it difficult to compete and
innovate somehow benefit the consumer is the most funny of Dan's
assertions. He probably things public choice theory is the study of
the dynamics by which the winner of an award targetted at NPR
produced programs is picked.
Alice Bowie|9.15.09 @ 9:08PM|#
I finally thought up a solution that will work.
It will make libertarians happy and it will make conservatives
happy.
1. Deregulate health insurance...take away all of the
regulations.
2. Create a Socialized PUBLIC PLAN which is completely voluntary
and libertarians/conservatives can stay out of them...if they wish.
This plan will be taxed at a high rate...however, it will cover all
that pay toward the tax. The usual/customary cared covered by
private insurance would be the standard for this public policy. The
government can hire Doctors/Hospitals from the tax revenues and
employee people directly and offer clinics.
3. The People that don't want healthcare or public healthcare will
NOT BE TAXED. Tax ONLY those people that selected the PUBLIC PLAN.
The Libertarians/conservatives and all those other people on TV
that don't want health insurance and prefer wars can keep their
current insurance or choose not to have insurance at all.
4. Remove ALL restrictions from hospitals/doctors from having to
treat anyone that doesn't have insurance. That is, if you don't
have medicare, medicaid, the public plan, or private
insurance...you cannot get any treatment....including emergency
treatment.
5. Allow a three month window to join the Public Plan. Anyone who
opted not to take the Socialized PUBLIC PLAN will NOT be allowed
into the plan for five years. If you've opted to pass on the public
plan, pre-existing condition clause will apply and will NOT be
covered in the public plan.
|9.15.09 @ 9:54PM|#
The insurers want to set up shop in a low-regulation state,
then sell to the other states without having to comply with the
laws of those other states.
So if, say, Vermont requires insurers to pay for an overnight after
giving birth but Alabama does not, then insurers want to
incorporate in Alabama and sell policies in Vermont that do not
cover the maternity overnight.
Imagine if you could disobey the speed limits in one state by
wearing the license plates of a different state, and you have an
idea of what the insurers are trying to get for
themselves.
How about letting the individual buying the policy decide if an
extra night's stay in the hospital is worth the marginal increase
in premiums.
There is absolutely no reason to think that providing consumers
with more choices would cause consumers to prefer the cheapest and
least extensive coverage. It's not like they can't read the policy
before buying it.
Moreover, there is no reason why Blue Cross of Utah couldn't simply
sell a policy designed to meet California's particular requirements
anyway.
|9.15.09 @ 10:08PM|#
I just don't see what's so horrific about letting insurers
offer whatever plans they like and letting people decide which plan
they want. This strikes me as hard to argue against.
According to Dan, if you allow people to make choices, the vast
majority of the population will choose the shittiest plan
available. Because everyone in America is so amazingly stupid,
compared to Dan, who knows what's best for them.
Dan|9.15.09 @ 10:13PM|#
Anybody still interested in whether MikeP is anything more than
a smoke-blowing, time-wasting, bad-faith liar, here's one link that
puts the lie to his completely bulls--t, made-up claim that the
industry does not want to ape the credit-card system of
race-to-the-bottom regulation:
http://scholarship.law.georgetown.edu/cgi/viewcontent.cgi?article=1025&context=ois_papers
Note that AHIP's main DC flak is the author.
Gilbert Martin|9.15.09 @ 10:20PM|#
"Leave it to a bunch of Ivy league fucks to get the commerce
clause 100% wrong."
They got it very wrong a long time ago when they dreamed up the
notion that it allowed to regulate anything that they claim has an
"effect" on interstate commerce rather than just actual interstate
commerce transactions.
That's not what the Constitution says and it most certainly was not
what was intended by the founders.
juris imprudent|9.15.09 @ 10:35PM|#
But even if I am mistaken on that count, see 4:42
pm.
OK, so who is playing Dan? I'm impressed - this is almost Neal
level trolling.
anonymous|9.16.09 @ 2:16AM|#
"I finally thought up a solution that will work.
It will make libertarians happy and it will make conservatives
happy.
1. Deregulate health insurance...take away all of the
regulations.
2. Create a Socialized PUBLIC PLAN which is completely voluntary
and libertarians/conservatives can stay out of them...if they wish.
This plan will be taxed at a high rate...however, it will cover all
that pay toward the tax. The usual/customary cared covered by
private insurance would be the standard for this public policy. The
government can hire Doctors/Hospitals from the tax revenues and
employee people directly and offer clinics.
3. The People that don't want healthcare or public healthcare will
NOT BE TAXED. Tax ONLY those people that selected the PUBLIC PLAN.
The Libertarians/conservatives and all those other people on TV
that don't want health insurance and prefer wars can keep their
current insurance or choose not to have insurance at all.
4. Remove ALL restrictions from hospitals/doctors from having to
treat anyone that doesn't have insurance. That is, if you don't
have medicare, medicaid, the public plan, or private
insurance...you cannot get any treatment....including emergency
treatment.
5. Allow a three month window to join the Public Plan. Anyone who
opted not to take the Socialized PUBLIC PLAN will NOT be allowed
into the plan for five years. If you've opted to pass on the public
plan, pre-existing condition clause will apply and will NOT be
covered in the public plan."
I have a better plan, which has even fewer steps:
1. Have everyone voluntarily give money to the government for
funding everything, but make it so that everyone gives even more
than they do right now just because they're so ennobled and
challenged by the call to service and stuff.
2. Elect politicians that are good and wise and will place what is
best for the nation as a whole (determined objectively using
science) above partisanship and cronyism and beliefs that I
disagree with and consider laughable.
3. The politicians in step 2 will use the money from step 1 wisely
to solve all our problems, not just healthcare!
Seriously, your #1 is a political nonstarter, 4 would end in
outrage as soon as the first person died due to being denied care,
and there's no way to force politicians to stick to 3 and 4 short
of a constitutional amendment and several assassinations to make
the point stick. Are you just goofing around or something?
anonymous|9.16.09 @ 2:43AM|#
"According to Dan, if you allow people to make choices, the vast
majority of the population will choose the shittiest plan
available. Because everyone in America is so amazingly stupid,
compared to Dan, who knows what's best for them."
Under the status quo, most people don't 'make choices' to begin
with. Unless several consumer-empowering reforms (notably, breaking
the link between employment and insurance) went in to balance this
out, the lefties are right that more people might get screwed than
would benefit. Their example of the credit card companies shouldn't
be carelessly dismissed.
A cynic familiar with American politics should assume that the
worst outcome will happen -- most consumer-friendly reforms from
the right will be tossed out, and this "reform" will be taken alone
as a "compromise" with the opposition, though in reality it will be
a concession to the insurance industry to get them on board with
giving the government more control over health care. Then, when the
insurers inevitably abuse the shit out of it, it will be used as
evidence that economic freedom and deregulation is a disaster and
that we should all give the government still more control over
health care.
Taken alone, many of the other proposals from the right will still
provide some benefit; they don't require interstate insurance to
work properly, but the reverse is not true. From a practical
perspective, this is one reform that libertarians should put on the
back burner or drop entirely.
Indeed, from a practical perspective, they should support ending
the tax loophole for insurance plans, as it would be a true
compromise with the tax-loving side of the political spectrum.
Meanwhile, it would start creating pressure toward breaking the
link between employment and insurance. That pressure could be
increased dramatically by mandating for several years that
employers allow their workers to take their insurance subsidy in
cash. Without being encouraged by their boss and the IRS, workers
will mainly see downsides to employer plans (e.g. losing it when
you lose your job) versus individual policies. As fewer workers use
employer plans, employers will see little reason to offer them at
all. It's actually a little like the argument that the public
option will eventually push everyone into government care, but in
reverse.
|9.16.09 @ 6:34AM|#
here's one link that puts the lie to his completely
bulls--t, made-up claim that the industry does not want to ape the
credit-card system of race-to-the-bottom regulation:
Do you even read the evidence you offer as your proof?
The concluding paragraph of this academic legal study of the
possibility of purchase of insurance across state lines
(PASL)...
This paper has outlined a variety of other legal and practical issues that arise from a federal PASL proposal, many of which have been raised and vigorously discussed by consumer advocates, insurance commissioners, and academics. Perhaps the overriding issue is how PASL proposals - which impact only the individual market - would fit within what seems to be a broader national effort to reform the health care system in terms of both access and affordability. PASL proposals in essence attempt to simplify only one element of the health insurance regulation, by eliminating comprehensive (and often duplicative and variable) state-by-state regulation, while leaving in its place arguably less comprehensive regulation that may also be less protective of individuals from the "primary state." As the CBO has noted, these proposals may drive healthy individuals currently insured by employer-based coverage to opt for individual, less expensive coverage purchased from another state, leaving sicker and more expensive workers in the group coverage. Broader efforts at reform that address all markets - individual, group, and government-regulated - may be the better approach to reform.
That is supposed to be the ringing proof that the
insurance industry is trying to undo the prohibition of buying
insurance across state lines? This paper is trying to conjure
reasons not to make that reform!
|9.16.09 @ 6:40AM|#
Dan, I wasn't trying to blow smoke or be a bad-faith liar. I
asked because I honestly don't know why such a stupid restriction
exists and can see only three interests that want it that way:
state legislatures, state insurance bureaucracies, and insurance
companies.
You made the claim that insurance companies wanted to get rid of
that restriction. Although it seems that the opportunities offered
to small insurance players by lifting that restriction would be
very threatening to the big players, I can imagine that large
companies that think they could be more competitive in regulatory
capture at the federal level might want interstate markets, and so
would like to see who might actually be in favor of that
reform.
If you are indeed a Neal-quality troll, I say well done. I enjoyed
it.
If you are not, could you at least read your links before you make
me read them?
Michael Ejercito|9.16.09 @ 10:04AM|#
The federal government could destroy the state laws by making it a race to the bottom, with the lowest state regulators controlling for everybody, which is what you want, and what the credit card industry already has ( -- great how that turned out in real life).
Have we experienced this race to the bottom in other industries
like retail or restaurant or lodging?
Yes, because every other sector of the economy aside from the state regulated sectors of alcohol and guns is a total and utter disastrous race to the bottom where consumers never get anything they want.
Indeed.
anonymous|9.16.09 @ 5:39PM|#
"Have we experienced this race to the bottom in other industries
like retail or restaurant or lodging?"
Does the federal government require that your state allow those who
run restaurants and hotels to be able to choose which state's laws
they have to obey? The actual products sold at retail might be
unrestricted in many cases, but the retailers themselves still
usually have a variety of state and local laws to deal with.
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