• Just explain this one thing to me

    I want to write something on Gov. Romney’s health care speech/proposal, but I can’t start until someone can give me a simple answer to this question: How can you simultaneously argue that states should have the ultimate responsibility and right to experiment within their own walls (slide 16) AND that people should be able to buy insurance across state lines (slide 18).

    Don’t get me wrong; both are arguments that conservatives make. It’s just that few people make them at the same time. That’s because they run counter to each other.

    If you believe in states’ rights, then you believe that states should have the ability to regulate their markets themselves without outside intervention. When Gov. Romney says that the Massachusetts plan was “right” for Massachusetts, and that every state should decide health care reform for itself, that’s one argument.  When Gov. Romney says that people should be able to purchase insurance across state lines, he’s arguing that individuals should not be bound by regulations and should be able to do what they want.

    But when he argues the latter, he’s making the former impossible. His Massachusetts plan would fail completely if residents of that state could purchase plans from other states, according to other regulations. If New York wants to set community ratings (as should be their right by Gov. Romney’s former argument), then allowing healthy people to buy policies from Texas where no such regulations exist (as should be their right by Gov. Romney’s latter argument), causes New York to fail.

    Letting people buy policies across state lines means that states will be regulated by other states – likely the ones with the least restrictions – instead of the federal government. But they won’t be “laboratories” or have real power.

    I believe Gov. Romney knows something about health care reform. So I’d appreciate someone asking him to reconcile these two ideas.

     

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    • Aaron
      Of course, and reconcile I will–look under DSM IV: see bipolar disorder. Romney is advocating for the rights of states to refuse their lithium. What’s the problem? Dont like a bit of tsuris in your health care laboratory?
      Brad

    • >>If you believe in states’ rights, then you believe that states should have the ability to regulate their markets themselves without outside intervention.>>

      Romney is not saying that states should be able to regulate. Government should not be regulating business arrangements – it’s a private matter between businesses and customers. States rights don’t extend to regulating markets. Under the Republican ideology, no one should regulate markets (other than in a totally pro-business manner).

      In slide 16, he’s just pushing for states deciding how to spend money rather than the feds making that decision.

      Consider credit card regulation as a model for what he’s talking about.

      • Romney is arguing that states should regulate the behavior of individuals. That is, imposing an individual mandate is a perfectly fine thing to do for a state to make. As Aaron pointed out, you can’t both do that within a state and allow individuals to choose to buy insurance in a different state.

        • Fair point.

        • Why not? Why can’t a state force you to buy insurance, but it leaves it up to you which insurance to buy? It could also force you to buy insurance that meets certain criteria, which could be purchased from an insurance company in another state. Why is this impossible?

    • I don’t think these positions are contradictory. What about Romneycare eliminates the possibility of buying insurance from another state? Even if the state set minimum requirements, those requirements could theoretically be met by an insurer from another state.

      I think what he envisions is that every state creates its own regulatory requirements, and insurance companies in those states meet those requirements. Then the insurance can be sold across state lines. So in practice, a citizen of a state would have access to all insurance plans from states with stricter requirements than that state. Then the companies would better be able to pool their insurees and offer lower prices.

      Isn’t this already happening with car insurance and banks?

      • You do realize that this currently happens? Any insurance company can sell in any state they want as long as they meet state requirements.

        What they are proposing is that any insurance company can sell any insurance policy in any state regardless of state requirements. It will reduce costs because they will reduce coverage. I imagine policies for women would be much cheaper without maternity coverage, for instance.

        It was hard enough buying an individual policy among a couple of companies when coverage was pretty standardized. I shudder to think what it would be like if I had to take the policies to a lawyer to interpret the fine print.

    • The same reason I can argue that Japan and America should be allowed to experiment with how to make cars but that Americans and Japanese should be able to buy either Fords or Toyotas..
      Or the reason that I can argue you and should be able to experiment with different ways to generate income, but should still be able to consume each other’s services.
      Once more, here’s how this is supposed to work, each state makes its own set of regulations, but people are not forced to purchase according to their state’s regulations – this means that insurers will set up shop in places where there are the best set of regulations making it so each state has an incentive to not make bad regulations. The negative feedback process is how bad ideas get removed from the system. When you go with one set of federal regulations, and there is no mechanism with which to escape those regulations, there is no negative feedback process so bad ideas will stay around a lot longer than they otherwise would have. The same is true if you have 50 state regulations but people are forced into purchasing according to their states regulations.

      • “Once more, here’s how this is supposed to work, each state makes its own set of regulations, but people are not forced to purchase according to their state’s regulations ”

        In which case, they are not regulations, just guidelines or friendly suggestions. Form the provider POV, having lots of insurance companies bidding for my business will be wonderful. I should make a mint.

        Steve

    • It’s pretty simple. They don’t really believe in states rights. But they need to pretend that they do. It’s ideology and politics coming into conflict with good policy and reality.

      In Romney’s case, he is running for President for a party who opposes a healthcare plan similar to one he implemented. He is trying to take credit for it while denying it.

    • To a broader point, how does a statement like, “His Massachusetts plan would fail completely if residents of that state could purchase plans from other states, according to other regulations,” not prove the Massachusetts plan is a complete failure?

      If Wal-Mart could only survive by burning down every other grocery store, how does that prove that nor prove Wal-Mart’s business model is a failure.
      If I could only winning employment by eliminating all competition how does that not prove I am not worth hiring?
      If something can only survive if there is no competition, how is that not proof that it inferior?

    • Actually I think the answer to your question is on this site here.

      http://dismalpoliticaleconomist.blogspot.com/2011/05/mitt-romney-debates-mitt-romney-on.html

    • Currently national companies with employees in multiple states can purchase nationwide group health coverage for their employees through a single source (ie: United, Aetna, Cigna). However, in each state the coverage must meet minimum state requirements so these large insurers have amendments that they append to the coverage for each state in which the employer has employees. The insurers also have to be licensed in every state in which they do business or provide benefits.