When is Interstate Sales NOT?

It seems the proposed interstate insurance sales initiative has left some of the Democratic-Farmer- Laborer (DFL) party members nervous in Minnesota. Rep. Joe Atkins (DFL-Inner Grove Heights) has introduced his version of interstate sales, HF 3245. The bill allows out-of-state policies to be sold in the state, but only if the policy (and company) meets all Minnesota filing requirements, follows all Minnesota mandates, and all other Minnesota laws. So how is this approach an interstate sale of insurance? In short, it is not. It is political trickery pure and simple.

Only HF 2910 by Rep Laura Brod (R-New Prague) will provide Minnesotans with the choice to choose either from in-state or out-of-state policies.

ALEC Celebrates New Idaho Law

Here’s the American Legislative Exchange Council (ALEC) on the new health care freedom law in Idaho:

Yesterday, Idaho became the second state (after Virginia) to enact legislation to protect their citizens from being forced to purchase health insurance or participate in any health care system against their will. TheAmerican Legislative Exchange Council (ALEC) has identified 37 other states that have passed or introduced similar bills or have announced that they will introduce this legislation. Already, at least one house of the legislatures in Missouri, Tennessee, and Oklahoma have also passed such legislation, and Arizona’s measure will be put before voters in 2010.

“House Bill 391aa, ‘The Idaho Health Freedom Act,’ is not saying no to health care reform. In fact, it’s the first step in saying yes to real health care reform in Idaho and providing Idahoans with what they want,” said Idaho State Representative Jim Clark, the bill’s sponsor.

This bill and other state legislative initiatives are based on ALEC’s model Freedom of Choice in Health Care Act. The Idaho legislation would shield the state from a federal requirement to purchase health insurance under fine or penalty.

“This bill sends a message that the State of Idaho will not be steamrolled by Washington politicians bent on taking away our health care freedoms,” said Idaho Representative Raul Labrador, a co-sponsored the legislation. “If Congress passes a mandatory health care reform bill, the freedom act authorizes the State of Idaho to hire an attorney whose sole purpose will be to mount a legal challenge against federal interference with our medical decisions,” added Labrador.

Idaho Representative Lynn M. Luker, also a co-sponsor, said “The state of Idaho joins with other citizens of our great nation to say ‘enough,’ and has backed its position with a firm policy and commitment to stand up for the liberty of its citizens by passage of the Idaho Health Freedom Act.”

The Freedom of Choice in Health Care Act has already been passed, filed or prefiled in 33 states—Alabama, Alaska, Arizona, Arkansas, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Mississippi, Missouri, Nebraska, New Hampshire, New Jersey, New Mexico, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Tennessee, Virginia, Washington, West Virginia, Wisconsin, and Wyoming. Lawmakers in an additional four states—Montana, North Carolina, Rhode Island, and Utah—have publicly announced their intentions to file the legislation. A citizen-led initiative has also been announced in Colorado.

A complete map with links to the legislation in each state is available online at www.alec.org.

Rationing Through Underpayments: Walgreens Edition

From the Seattle Times:

Effective April 16, Walgreens drugstores across the state won’t take any new Medicaid patients, saying that filling their prescriptions is a money-losing proposition — the latest development in an ongoing dispute over Medicaid reimbursement.

The company, which operates 121 stores in the state, will continue filling Medicaid prescriptions for current patients.

In a news release, Walgreens said its decision to not take new Medicaid patients stemmed from a “continued reduction in reimbursement” under the state’s Medicaid program, which reimburses it at less than the break-even point for 95 percent of brand-name medications dispensed to Medicaid patents.

As someone pointed out to me, “And the bill in Congress will put tens of millions more Americans in Medicaid…  but not your Member of Congress.”

Rationing need not be done explicitly. When government plans cut back on their payment rates, expect more companies, and physicians, to follow this example, meaning it will be more difficult for you to get the treatment you need.

Bigger hospitals, bigger Medicare losses

Need another reason to focus on states instead of Washington for real health care reform? A new study by MedPAC argues hospitals can control their costs in response to demand. Hospitals with market power charge private insurers more, don’t worry about costs, and so lose money on Medicare patients, but maintain high profit margins.

Taking this claim to the next step, there are two ways to deal with market power. One is to establish a competing outside power, like a single payer or a government regulator, but that can lead to problems like collusion. The other is to open the market for and allow competitors to arise naturally. The federal government is trying to establish the former. States could eliminate certificates of need and allow for-profit hospitals to bring about competition among hospitals.

PA Government Hikes Insurance Premiums

An insurance company in Pennsylvania raised its premiums by 92% this year. Unlike the situation with Anthem Blue Cross in California, though, I have yet to hear anyone from the Obama Administration attacking this insurance company. You’d think this would be a ripe target for their ire, given that Anthem Blue Cross only raised its rates by 38%. What’s the difference? In Pennsylvania it’s the state government that raised insurance rates, not a private company.

The government-run health insurance plan in Pennsylvania, covering people who can’t get Medicaid but who are under 200% of the federal poverty level, has “become a magnet for the sickest people in the state, even as rising unemployment had driven more people to sign up,” according to state officials.

Those who run the program say that the only way to avoid this premium increase is to mandate that everyone must have insurance, so the cost can be “spread around.” This isn’t a way to control costs, though. It’s merely shifts the cost to other people.

Whether government-run insurance or private insurance, the pressure is the same to raise rates. It just seems that when it comes to scoring political points, private insurance gets singled out as the villain.

But Today I Am Still Just a Bill

If you’re of a certain age, you’ll remember short civics-like cartoons that were placed in-between episodes of Scooby Doo and Bugs Bunny. I don’t remember anything about “deem and pass” in this video–just the part about both houses of Congress passing the same piece of legislation.  Enjoy.

(Note the irony: The “bill” in the video is of dubious constitutionality. Congress making local traffic laws?)

Minnesota State Senator Files Objection to ObamaCare

Given that the title of this site is STATE House Call, it’s appropriate to mention the activities of state-level officials on the health care debate. Here’s one example: A state senator in Minnesota wants the attorney general there to file a lawsuit against the individual mandate, should it come to pass. Or should I say “deemed to have passed?”

Anyway, the blog FreedomDogs has the news, which is relayed from the Senate Republican Caucus:

Minnesota Senate Republicans today took a stand against the impending federal health care overhaul moving through Congress. Senator Julianne Ortman of Chanhassen introduced a legislative resolution that would formally request Minnesota’s congressional delegation to stop the passage of the federal health care reform bill, HR 3590.

The resolution also engages Minnesota’s Attorney General in preparing to file a lawsuit to protect and defend the residents of the State of Minnesota from an abuse of constitutional power or illegal action by the federal government upon the passage of this bill.

“The legislation being considered by Congress is unconstitutional and threatens the rights of Minnesotan citizens,” Ortman said. “The State of Minnesota has a responsibility to act now to protect and defend itself and its residents from an abuse of power by the federal government.”

Ortman referenced several unconstitutional elements in the bill, including an individual mandate that would force U.S. residents to buy health insurance. Proponents of HR3590 argue that the Commerce Clause contained in Article I, Section 8 of the U.S. Constitution gives Congress the authority to impose this mandate; however, Ortman sees this as a clear abuse and violation of the Commerce Clause.

Sen. Ortman also raises questions about the legitimacy of how the fine for not having insurance would be levied.

In a Recession, Employment-based Health Insurance Declines

The link between employment and health insurance has been fraying for a while now. In the abstract, that’s good: With isolated exceptions, most people don’t buy food, housing, transportation, property insurance, telephone service, Internet service or a supply of coffee beans from their employer, so why should something as important as health insurance be held hostage to the whims of the boss?

That’s in the abstract. In the real world, which since World War II has discriminated against individuals who buy insurance on their own, severing the link usually comes through the difficulty of losing one’s job.

Given the recession, it’s no surprise that the number of people with employment-based insurance has gone down. According to a new report from the Robert Woods Johnson Foundation, “the number of middle-income earners who obtained health insurance from their employers dropped by 3 million people from 2000 to 2008. Just 66% of people in families earning roughly $45,000 to $85,000 are now insured through their employer—a drop of seven percentage points [or 2 million people] from 2000 to 2008.” Lost your job? You’ve lost your insurance, too. Yes, COBRA is available, but you may be shocked to find out how much of your income has previously gone to insurance (In 2008, the number for a family policy was, on average, $8,667 in insurance in lieu of wages, or roughly $725 per month).

RWJF repeats the number of uninsured at about 47 million, which simply overstates the case (see, for example, this article from Sally Pipes, which whittles it down to 8 million).

The report ought to be a call for reforms to make it possible for people to own health insurance that doesn’t move from job to job: Allow people to buy insurance that has been approved in another state, if they don’t like what’s available in their own; dismantle mandated benefits that drive up premiums; remove guaranteed-issue and community ratings laws that cause premiums to skyrocket; and above all, give people the same tax treatment that employers get for buying health insurance, so the law doesn’t favor one type of insurance over another, as is now the case.

Unfortunately, RWJF doesn’t call for those measures, preferring instead to plump for an ever increased role for government, making the middle class more dependent on the whims of politicians.

One thing RWJF does well is sell its stories to the established media. So expect a story or two about the report, focusing on your state: Connecticut, Ohio, Oregon, and Utah, for example. I will update the list as I find new stories.

Reduce Costs by … Restricting Supply?

Roy Cordato of the John Locke Foundation talks about the fallacy of certificate-of-need laws, which impose political and bureaucratic restrictions on the opening of new hospitals and other medical facilities.

Idaho Enacts Freedom of Choice in Health Care Act

From AP News:

Idaho took the lead in a growing, nationwide fight against health care overhaul Wednesday when its governor became the first to sign a measure requiring the state attorney general to sue the federal government if residents are forced to buy health insurance.

Similar legislation is pending in 37 other states.

A similar measure has already been enacted in Virginia, where the governor let it become law without his signature. Idaho’s governor, C. L. “Butch” Otter, dismissed suggestions that such a law has no constitutional standing. He said, “The ivory tower folks will tell you, ‘No, they’re not going anywhere. But I’ll tell you what, you get 36 states, that’s a critical mass. That’s a constitutional mass.”

I”m not sure that having a lot of states on board is itself something that gives a measure legitimacy. On the other hand, the Supreme Court has been known to follow election returns. Perhaps they’re be able to read the actions of legislatures, too.

What Could Possibly Go Wrong?

Oddities and ironies abound in the health care morass:

My friend Chuck Ellis well summarizes where we are in the health care ‘reform’ debacle: “Lemme get this straight….we’re about to pass a health care plan written by a committee whose chairman says he doesn’t understand it, passed by a Congress that hasn’t read it but exempts themselves from it, to be signed by a president who also is exempt from it and hasn’t read it and who smokes, with funding administered by a treasury chief who didn’t pay his taxes, all to be overseen by a surgeon general who is obese, and financed by a country that’s broke. What could possibly go wrong?”

Thanks to Michael Quinn Sullivan.

Do These Food Stamps Make Me Look Fat?

Before we think that more government action is going to improve the health of Americans, consider this item from Scientific American: “People never receiving food stamps had lower rates of obesity than those who had been on them at some point in their lives, even after accounting for differences in socioeconomic status.”

So why do food stamps make you fat? Is it because junk food is cheaper? Perhaps. But the answer may lie in the very structure of the program.

Illinois Health Bureaucrats Talk Up Fat Tax

The Obesity Prevention Initiative Act put in motion a mechanism whereby your waistline becomes a matter of concern for health bureaucrats in Illinois, which included a hearing in southern Illinois. At the meeting, public officials and others discussed, among other things, adding a 5% tax to all sales of fast-food, presumably to fund advertisements to browbeat you into eating more salad (hold the hard-boiled egg!).

The legislation is based in part on the claim that obesity accounts for “more than 9% of total health care costs, approximately half of which are born by public resources via Medicare and Medicaid and the majority of the remainder born by employers.”

So why don’t we get Medicare and Medicaid out of the business of paying for our health care? Throw in employers, too.

You think bans on trans fats and soda taxes are bad? Just wait until millions of people jump over to expanded Medicaid programs under ObamaCare.

No ObamaCare in Idaho

As mentioned on this blog previously, the Idaho legislature passed the Idaho Health Freedom Act, which tries to prevent Idahoans from suffering from any federal health care mandate. Governor Butch Otter will sign the act into law today. In a sign of Governor Otter’s strong support of the legislation, this will be his first public signing ceremony of the legislative session. Upon Otter’s signature, Idaho will be the second state in the nation to enact a law to fight any federal mandate that individuals must purchase health insurance.

The Failure of RomneyCare

Former Massachusetts governor and likely 2012 presidential aspirant Mitt Romney has been on the wrong side of the defining political battle of our time.

Mr. Romney claimed earlier this month on “Fox News Sunday” that the Massachusetts health reform plan he signed into law in 2006 is “the ultimate conservative plan.” But there are many similarities between it and the ObamaCare loathed by conservative voters.

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