Diary

Replacing Obamacare: Can Cross-State Policy Sales Work?

NOTES:

a) SS396 said: “You cannot have one State dictating how the liabilities in another State
are to be employed or interpreted, or the extent of their
applicability”

b) Kyle-MI said: “It is the very definition of interstate commerce and a legitimate application of the commerce clause of the constitution.”

c) See ( http://www.redstate.com/patterico/2017/03/03/ted-cruz-rand-paul-bring-attention-need-free-market-repeal-obamacare/ )

d) Propose that, because of the need to replace O’Care and get the ability to buy H. Ins. across state lines that a negotiation between the States and the Commerce Dept. will take place with the understanding that (1) the R states are in the majority (by a LOT) and (b) Commerce will honor the majority’s wishes.

e) Note that this is a first step to restoring States to a more equal footing with the general government

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For (a) If the product purchased is from another state then it is that state, and its insurance regulations will determine liabilities IN THAT STATE. Each state will provide transparency and each consumer can decide if they trust that state’s regulatory regime.

If as adults we make a contract, that for all intents an purposes is a financial contract, with an insurance entity that we know is regulated in another state and, through those regulations, we know will have adequate reserves to pay its claims and very few other, though critical requirements, then it seems that we, AS ADULTS, should be able to purchase those products.

But, for (b) it seems to me that our founding fathers created the Commerce Clause for situations that we find in (a), namely that State A is constraining free trade of, in this situation, services available in State B.

That is, when one state has created onerous requirements for any service purchase within their state by restricting products or services created in another state by requiring the erection of a regulatory wall in their state.

Some history:  (Put something in here about the tariffs imposed by big states on products purchased by smaller, less powerful states.)

The commerce clause granting power to the federal government is simple, to wit:

“To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.”

As with many interpretations of responsibilities under a clause would be that the regulation should be (a) the least intrusive method possible 2) effective.

Currently, federal regulations don’t intrude AND they are NOT EFFECTIVE in ‘making regular’ trade between the states.

As I’ve said above, it can be argued that these state insurance regulations are a restraint of trade between entities in one state and people in another state and are subject to federal regulations.

How can this be? W.R.T. environmental rules, there’s this: “Pruitt said he would review a federal waiver provided to California that allows it to operate clean car standards that are more stringent than federal rules. Pruitt said “we shouldn’t prejudge the outcome” of his review.”

From that it’s seems to be apparent that California is only allowed to restrict trade in cars by the imposition of more stringent federal rules through a FORMAL WAIVER by the federal government.

Whether you like the feds getting involved in the health insurance market, it’s clear that there is a group of states that, for many reasons including social justice, would undermine any effort to reduce these barriers to trade across state lines in the insurance market.

The federal government already ‘makes regular’ trade between the several states in many areas (the internet sales tax is one of those) so, it seems clear to me that the commerce clause provides the federal government with a vehicle to help the citizens in the states to get out from under the yoke of over-controlling state regulatory schemes in the financial or insurance service industries.

So, a citizen of State A, even though the service in State B is EXACTLY what they want, can’t buy it because of the constraint of trade regulations enacted in their state associated with that service.

It seems eminently reasonable for the federal government to specify those minimum rules that a service like insurance must satisfy in order to get over a national, minimum, standard that would require that insurance policies from ONE state be available in ALL states.

Allow the states to put additional conditions on insurance products that comply with their state’s rules and let the consumer sort out which product they want to purchase. If one state’s feature rich policies are preferred over the sparser policies available in other states then policies would be snapped up in those states.

Insurance companies would likely pick the states that gave them the maximum flexibility with the, for consumers, the maximum protection then they will pick those states over the overly regulated states because they will likely make a boatload full of money more in the rationally regulated states.

THAT, I think, is the question associated with the sale of insurance product across state lines and the role that the Commerce Clause plays in allowing insurance to be sold across state lines. Maybe I’m wrong.

In math we find useful both the greatest common factor (GCF) and the least common multiple (LCM) depending on what you’re looking to do.

I think that Obamacare essentially took all the components they found they wanted, and like the LCM, they multiplied factors together and the complexity and, hence the cost of those policies became onerous.

I’m arguing that the federal government should use the Commerce Clause and strive for an interstate standard at the GCF rather than the LCM. That is, find those minimally required common elements and make those as mandatory requirements which, if a policy has them, then the policy can be sold across state lines.

This also means that if someone from, say, N. Dakota willingly wanted to buy a policy regulated by, say, California and that policy conformed to those minimum requirements, N. Dakota could not stop that policy from being bought by a citizen in their state.

Free will is free will but everybody should realize that an over-defined policy will result in two things:
(1) An increase in profit for the insurers as they would not be paying for the ‘impossible’ conditions like men paying them for female health care when they’d never use it; or
(2) A subsidy to the a class of citizens in, say, California paid for by a citizen of, say, N. Dakota!

The policies ‘must’ conform to some interstate standard but those standards mimic the lower cost, GCF equivalent, set of requirements. Like I said above, things like financial stability are common to all states’ requirements so, those would be in that list.

Coverage for children or female health issues may be acceptable for someone in N. Dakota that has no children and they could spend their money on that policy if they’d like. But, a childless male in N. Dakota might find it an unacceptable cost and that $$$ was spent on a nothing-burger and they would, if rational, choose a policy without that coverage.