More From the Boys at Brad and Britt

I suspect that we’ll be talking about health care and the health care law, Obamacare, for some time now.  And rightfully so, this is a huge issue at a time when we need to craft solutions, and quick.  We simply have no money and need to solve that problem.

So, health care.  This morning on the Brad and Britt Show the issue of allowing insurance companies to sell their policies across state lines came up.  And Brad admitted he didn’t know why that was such a sticking point to Republicans.

Blink.  Blink.

This illustrates the disconnect in the discourse today.  On one hand you have a group of people who want to legislate just “whatever they want”.  This is akin to passing a l aw that requires the ice cream man to deliver me ice cream before bed.  Who doesn’t want THAT?  And on the other hand, you have a group of people who have actual knowledge of how things work trying to legislate the “business” of government.

So, Brad, here is why allowing inter-state trade of insurance would reduce costs.

Suppose that a corporation wants to open stores in all 50 states, say, like Target.  But in order to do so, they have to meet individual state mandates on the products in their store they sell.  Say, for example, that Minnesota has passed legislation that says Target must sell books to children of all ages and adults who are poor for $2.00 each.  Target, wanting to remain in business in Minnesota, will either stop selling books all together [selling books at $2 won’t return them a profit] or, OR….they will RAISE the price of all books such that the price of a book to a non-poor adult is enough to cover the cost of having to provide subsidized books to the poor and the young.

Or, say that South Carolina passes legislation that requires Target stores that sell groceries that when someone does buy groceries from them, the store has to deliver those groceries to the customers house.  Target will either stop selling groceries in South Carolina or, OR…they will raise the price of groceries to cover the government mandated delivery service.

Is it Targets fault that they are selling books at a higher price in Minnesota?  Or that they are selling groceries at a higher price in South Carolina?

No.

Now go further and say that ALL sellers of books in Minnesota must follow the same rules; likewise all sellers of groceries in South Carolina.

Overnight you have increased the cost of books and groceries in those states.  And for what?  For some government mandated feel good legislation.  After all, why do you hate the young and the poor who want access to books?  How DARE you pass laws that restrict their access to book?

And food?  There are people in this world [at least on] who are home ridden and don’t have the luxury or ability of going shopping.  Would you deny THEM food?  Soulness, greedy capitalist pig.  You are GREEDY!

So, in the name of altruism and good intentions, laws are passed that actually RAISE the price of goods while at the same time restricting supply.

As a citizen of Minnesota or South Carolina, would you like to enjoy the ability to buy a book in Iowa?  Or South Dakota?  Or even Mississippi if it were cheaper?  Would you not like to shop for books in the same way you shop for Star Wars action figures?  Or the citizen of South Carolina….would you blame her for peeking across the border in North Carolina for cheaper goods?  Or Georgia?  Or even, gasp, shopping on-line at Amazon?  [Where, by the way, they DO deliver your groceries to you].

It is the states that make mandates that causes insurance policies to rise.  Not ALL of the rise to be sure, but much of it.  When Maine passes a law that requires insurance companies to sell a policy to any person, no matter how sick, as long as that person has been living in Maine for 60 days, the cost of policies is going to go up.  When New York passes a law that requires insurance companies to cover acupuncture therapy, the price of that policy is going to go up.  When Vermont passes a law that forces insurance companies to cover up to 14 days in the hospital no matter the ailment, the cost of policies is going to go up.

THAT is why breaking down state barriers would reduce the cost of coverage.  Imagine if the Maine-ian could shop for a policy in North Carolina that covered only the eventualities and procedures that he wanted to insure?  His cost would plummet.  And his experience and value on his dollar would explode.

For sure Maine would see it’s insurance companies close shop nearly over night.  And so, if they wanted to keep those businesses in state, they would have to remove the punitive restrictions they placed on them.  And competition would force the cost down, the quality up.

That is why.  THAT is why we want to see insurance sold across state lines.

6 responses to “More From the Boys at Brad and Britt

  1. What about federalism and states’ rights? One thing I’ve generally agreed with Republicans about is the danger of federal usurpation of powers best left to the states. This sounds like a way to effectively force states to adopt particular policies involving health care, lest their insurance companies vanish.

    Health care is a big issue — we spend 16% of our GDP on it, and have huge coverage gaps. Other states spend8-10% of GDP and cover everyone, with health statistics showing they have results as good or better than ours. While letting insurance companies sell to all 50 states may limit state policy flexibility, I doubt it will decrease overall cost.

    • What about federalism and states’ rights?

      States would still be free to set regulations as they see fit. I, on the other hand, would be free to shop there or not shop there.

      This sounds like a way to effectively force states to adopt particular policies involving health care, lest their insurance companies vanish.

      Yes; exactly. You are seeing the same thing in modern California; companies are fleeing the Golden State in drives in order to escape the massive punitive regulations that they are subject too.

      we spend 16% of our GDP on it

      We do spend a lot of money on it. In many ways I see this as a feature, not a bug. For example, I’d rather live in a society where I can drop 20k per attempt in order to try to have a baby. [ Ask Celine Dion-most recent birth took SIX such procedures]. Further, we spend a TON on cosmetic medical care. Plastic surgery, laser eye surgery and liposuction.

      have huge coverage gaps.

      In many cases those gaps are folks that are happy to self insure.

      health statistics showing they have results as good or better than ours

      I have yet to see any statistic that shows our results are substandard. in fact, looking only at where people go to for medical care, America is #1. The world comes here, we don’t [except for commoditized well understood procedures] go there.

      I doubt it will decrease overall cost.

      It would, in one fell swoop, reduce the price of a policy in Maine by 66% literally overnight.

  2. No, the costs will just shift. The only way to have costs go down is to have either reduced care or reduced cost of care, not reduced insurance costs. We don’t get much for our higher health care costs, and the country can’t sustain what we do have. Other countries do it so much better than we do, they cover everybody, give quality care (our stats rank us about in the middle of the industrialized world) and do it cheaper. Moreover, conservatives and liberals alike in Europe would not give up their systems for an American one! They cringe at the thought, we have a very poor reputation for anything but expensive (and rare) very special care.

    I still think its wrong to have the feds ride roughshod over states, it would be yet a further weakening of federalism.

    • The only way to have costs go down is to have either reduced care or reduced cost of care, not reduced insurance costs.

      Well, to be fair to your point, if you are referring to the cost of delivering medical care, you are right. THAT cost will remain the same. However, much of the point of the health care bill was to extend insurance to everyone [or at least as many as possible]. So, to that extent, I have been assuming we’ve been discussing the cost of insurance.

      (our stats rank us about in the middle of the industrialized world)

      I don’t think that the stats you are referring to, or at least the one I think you are referring to, make your case. But I’ll leave making your case to you. 😉

      I still think its wrong to have the feds ride roughshod over states

      I agree with you. However, and I admit I should know for sure, I think it is a Federal mandate that prevents me, in North Carolina, from buying insurance in Utah.

  3. If it’s a federal mandate, then my point is indeed irrelevant. In general, one issue I strongly agree with most conservatives on is the need to return power (and financial capacity) to the states. I think most of the problems we face could be handled more efficiently and with support at the state level. I mean, if Vermont wants a single payer system, North Carolina wants very limited government involvement and Minnesota wants a mix, well, we can let them all experiment and then learn from the results. But right now the federal government sucks so much of the tax revenue that states have a limited capacity to act.

  4. I mean, if Vermont wants a single payer system, North Carolina wants very limited government involvement and Minnesota wants a mix, well, we can let them all experiment and then learn from the results.

    Agreed; the whole “Fifty Experimental States” thang.

    But right now the federal government sucks so much of the tax revenue that states have a limited capacity to act.

    Yes. The Feds tax the snot out of us and then offer it back if, IF, we agree to their ways of governing.

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