Bringing the Race to the Bottom to Health Care
posted by Frank Pasquale
What’s the most important part of McCain’s plan for health care? Writing in Slate, Robert Gordon suggests that it’s his effort to bring to insurance policy the current conservative movement to limit states’ abilities to govern their own affairs. Here’s Gordon’s take:
McCain . . . proposes to change the market for health insurance that people buy on an individual basis—he says that “families should be able to purchase health insurance nationwide, across state lines.” . . . . [Currently, many states] set a floor of protections. New York laws, for example, require that companies issue coverage to all new customers and not set higher rates for people who are already sick. . . . These rules may increase premiums for healthy folks, but they also give people with pre-existing conditions a decent chance to afford health insurance in the market for individually purchased policies. . . . [McCain] would allow insurers to choose the state laws under which they are regulated.
Americans with pre-existing conditions—cancer, asthma, diabetes, and the like—would need to pay even more than they do today. Through no fault of their own, more of them would end up without insurance. Meanwhile, insurers would improve their own profits by offering targeted policies to people with the fewest health expenses. . . . [I]t’s Robin Hood in reverse. Apart from the obvious injustice, this approach could add to spiraling health costs. The sickest 10 percent of Americans are already responsible for 70 percent of the nation’s health expenses. When more such Americans go uninsured, skip checkups, and land in the emergency room, they end up costing taxpayers more.
So I suppose someone who favored universal access to care could support McCain’s proposal. . . if they believed in Marx’s immiseration hypothesis.
By the way, from the NYT editorial I linked to, here’s a good summary of federal policy on subprime from a few years ago:
[At the time,] state attorneys general noticed a spike in predatory lending that the federal government was doing nothing about. When the states tried to rein in abusive mortgage lenders, the Bush administration finally did something. The Office of the Comptroller of the Currency issued rules nullifying state predatory lending laws over the objection of all 50 state banking superintendents.
May 24, 2008 at 10:35 am
Posted in: Health Law
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Responses (1)
A.J. Sutter - June 2, 2008 at 11:12 am
You’re ignoring a huge efficiency created by the McCain proposal: instead of having to buy off the legislatures of multiple states, the health insurance industry can focus its funds and attention solely on Congress.
The “crossing state lines” idea is an old one, and was incorporated into a bill (HR 2355) introduced in Congress in 2005. Jonathan Cohn reported about this in The New Republic back then, and mentions it in his book _Sick_ (2007) as well (@53). See also http://www.kaisernetwork.org/daily_reports/rep_index.cfm?DR_ID=32049 .
This tendency of free market imperatives to trump local sovereignty in order to wreak rational, life-threatening results had an echo in recent weeks, when Japan was told it was forbidden to donate imported rice to the Philippines, Africa and other areas facing food scaricty because to do so would violate a trade agreement with the US under WTO. (Most imported rice here is American.) The US eventually relented regarding the Philippines, but the plan that ultimately won its approval involved selling the rice, not giving it away.
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