Well, what a fortuitous development! If you haven't heard, John McCain has a new article in the new Contingencies magazine (It's not just for actuaries anymore!) in which he says the following:
I would also allow individuals to choose to purchase health insurance across state lines, when they can find more affordable and attractive products elsewhere that they prefer. Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation. Consumer-friendly insurance policies will be more available and affordable when there is greater competition among insurers on a level playing field. You should be able to buy your insurance from any willing provider—the state bureaucracies are no better than national ones. Nationwide insurance markets that ensure broad and vigorous competition will wring out excess costs, overhead, and bloated executive compensation. [emphasis mine — Charley]
Yes indeedy, he's talking about us, right here in Massachusetts. Didn't you just know it?
There are two approaches that health care free-marketeers really hate: “guaranteed issue” and “community rating.” Guaranteed issue is just that: When you apply for health insurance, the insurer has to offer you insurance, regardless of whether they want your risk or not. And “community rating” means that your risk is averaged out among the broader community, so you don't get soaked if you happen to be a bad risk. (In Massachusetts it's done by age, so that older people do indeed pay more for insurance than younger folks.)
Furthermore, there are a variety of regulations that require the insurance you buy to actually be worth something, to actually cover services, and protect you from financial ruin. This is called “MCC”, or “minimum creditable coverage” in MA. It constrains allowable deductibles, the services they have to cover, and so on. (There is legitimate controversy about which exact procedures are required to be covered.)
Now, does all this drive up premiums in MA? Yes (although the sky-high cost of actual services in MA has more to do with that). However, if you need a car to get to work, it won't do to buy the rusted-out jalopy on cinderblocks and call that your “ride”. Health insurance should insure. McCain's plan actively derides that very concept, in favor of a “free market” where anyone can get nominal, worthless “insurance”. Yay!
And otherwise, McCain's article is a document of mostly quite extraordinary fatuousness. How else do you describe blaming childhood obesity on “political correctness”? Dude just doesn't get it.
Massachusetts regulations that require coverage of birth control, or ivf treatments, which some people can’t avoid having to subsidize, either because their company decided on that plan, or Massachusetts required it. Obama apparently wants a national law requiring plans to cover BC.
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p>There should be a national standard for minimum credible coverage, though, that’s true. Should that vary state to state?
I’ve read Krugman’s line about this story that took exception to the same sentence, but different part:
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p>We should deregulate health care, like we did banking? How’s that working out for everyone?
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p>But as you note, MCC is what is of issue here, cheaper premiums for less coverage. What good is the policy if it doesn’t cover anything.
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p>It’s true that the already heavily regulated banking industry and the heavily regulated healthcare industry are both industries, kinda, and they both have 2 syllables and they’re both in the U.S.
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p>Other than that, I don’t get the comparison.
You think John McCain is an idiot for comparing health care to the banking industry, as John McCain made the comparison.
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p>McCain likely had the interview before September 18th, when he became Mr. Regulator (which is completely laughable). Maybe it was done on the 17th when he was still in his “the fundamentals of our economy is strong” BS. Basically he got caught in another gaffe due to his flip flop (lies) whatever you want to call it.
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p>Funny, isn’t it. When you try to put down a comment you instead slam your own presidential candidate.
McCain’s correct, and I’ve seen it with my own eyes.
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p>I once ran a multi-state, ERISA-exempt health plan with 1,100 national participants. It always amazed me I could get the same coverage in Indiana for 35% of what that coverage cost in MA, or 25% of what it cost in NYC.
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p>(And when I say “same coverage,” I mean exactly the same benefits. We had to design the plan to meet MA standards, so the coverage coast-to-coast was identical.)
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p>If I can get my checking account from Bank of America in Charlotte, NC, why can’t I get my health insurance from a reputable health insurer in TN?
Interesting. I think that boils down to a couple of things:
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p>a. Health care services are more expensive in MA than IN. Docs cost more, because everything costs more. IOW, if that Indiana insurer were to offer products to MA residents … they would cost something similar to what we pay.
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p>It is a real and pressing question as to whether we get better value for our money in MA than they do in IN. It seems doubtful, although in my anecdotal experience having lived in both places, care is much better here. (Yes, that’s worth a bucket of warm spit.)
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p>b. guaranteed issue/community rating. While IN does have guaranteed issue for small groups, there is none for individuals, as in MA. That might drive prices higher in MA.
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p>c. Mandated benefits. For example, IN doesn’t require coverage cervical cancer screening, MA does. There is legitimate disagreement about various mandated benefits, but overall they’d naturally drive premiums higher.
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p>etc.
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p>Fun comparisons here.
See my comments to JohnK above. The removal of state barriers to health insurance has merit.
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p>And if your so against that concept, why are you for a nationalized health system?
straw man alert, lol!
allowing child labor might have a propitious impact on childhood obesity. Is that a plank in the Republican platform yet?
In this article McCain says:
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p>What the heck is he talking about? It’s conservatives who didn’t want “our schools” (those liberal teachers and their unions) teaching children “quality-of-life information.” It’s conservatives who don’t want evil “big government” to ban junk food, limit soda sales or mandate gym class.
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p>I guess the only real solution to the childhood obesity problem is to stop all this “obesity” nonsense and get back to calling kids “fatty, fat, fat, fat”?
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p>Unbelievable.