More On Buying Health Insurance Across State Lines

I’ve expressed a real lack of enthusiasm for the Republican proposal that Congress should pass a law allowing groups to go jurisdiction-shopping for health insurance, especially in the absence of eliminating the prejudice against individual ownership of health insurance.

One correspondent chided me for allowing states’ “geographic monopolies” to stand in the way of competition. But isn’t that a fundamental characteristic of a state — that it has a monopoly over state laws within its own boundaries? If you don’t like it, vote in a new legislature or move to another state. I live in California, where personal income taxes are way too high and harmful to our welfare. But I’ve never heard a Republican politician propose that Congress pass a law allowing individuals to choose which state’s rate of income tax they pay, so Californians could opt to pay zero income tax by choosing Florida’s tax rates.

In any case, this is irrelevant: States can just go ahead and allow interstate purchasing of health insurance themselves. Here’s a bill in Washington State to allow just that; and here’s one in Georgia. So, just get on with it. There’s no need to wait for Congress to act.

Georgia Legislature Considers Interstate Insurance Sales

Georgia is taking the unprecedented step of allowing interstate sales of health insurance. This has never really been a federal issue. States are free to allow out-of-state companies to market products in their states. An article in the Rome News-Tribune reports that a bill has been introduced in the House that “would allow individuals and families to buy health plans that have been approved for sale in other states.” Governor Sunny Perdue is a big supporter, saying, “This legislation will open up the individual insurance market and allows consumers to find the plan that best fits their needs. It will also help the uninsured find a plan that works for them.” Similar legislation is pending in the Senate.

Georgia AG: There’s Nothing to Investigate Yet

Georgia’s two U.S. senators, Saxby Chambliss and Johnny Isakson, as well as Gov. Sonny Perdue, have asked the state’s attorney general, to, in the words of the Atlanta Journal Constitution, “determine whether the vote-buying deals were unconstitutional – and financially unfair to Georgia.” Thurbert Baker, the AG, wasn’t too interested in the request, saying that it’s all dealing with speculation right now.

My favorite, if that’s the right word, part of the story is this little gem: “[Sen. Harry] Reid countered that compromises are common in major legislation, adding that, instead of complaining, other senators should have sought similar deals for their states.” Politics in the classic and most profane sense: When faced with an unconstitutional act, join the vandals rather than protest.

The state may see its Medicaid rolls expand by 77 percent as a result of the federal legislation.

Medicaid Expansion Bad for Georgia

Is Medicaid expansion a good thing? Benita Dodd, of the Georgia Public Policy Foundation, lays out several reasons why it’s a bad idea for Georgia:

• Likely tax increases, due to increased state funding requirements
• Crowding-out other government spending
• It turns more control over Georgia government to Congress
• Price increases of over $1,500 for people with health insurance now

Georgia Legislators Discuss Opt-Out

Federalism is good in the abstract. It would also be good in the particular case of health reform, should it by some miracle stop a complete government takeover of health care. Recently, some legislators in Georgia discussed the option of a state constitutional amendment.

Should State X Opt Out of the Public Option?

Harry Reid, Senate majority leader, has floated the idea of letting states opt out of a “public option.” As you might expect, candidates for next year’s gubernatorial race disagree on whether the state should opt out.

(Curiously, the Morris News Service says the amendment would make it impossible for Georgians to “take advantage” of a federal takeover of health care.)

The article points out that under the Reid proposal, states face a prisoners’ dilemma: Their residents would pay federal taxes to underwrite the government-owned insurance company, but not be able to buy into it. At least that’s a possibility, since the opt-

The Uninsured in Georgia

How many people are without insurance in your state, and can they afford it? The Georgia Public Policy Foundation breaks out the numbers for Georgia, and provides a link to a nifty data tool that provides some answers–or at least estimates from the Census Bureau.

Here's the item from the foundation's Friday Facts publication:

Who are the uninsured? The proportion of people without health insurance in 2008 (15.4 percent) is virtually unchanged from a decade earlier. Of Georgia’s 9.5 million residents, 1.7 million were uninsured in 2008. This includes 299,000 non-citizens, 284,000 with household incomes above three times the poverty level ($66,000 for a family of four) and 580,000 living in households earning less than $25,000, many of whom are eligible for existing government programs and are not signed up. You can explore the latest estimates yourself here: http://www.census.gov/hhes/www/cpstc/cps_table_creator.html.

Georgia Legislators Say “No Thanks!”

The idea of state legislators helping their voters opt out of federal health care reform is getting more press, this time from the Atlanta Business Chronicle:

"A group of Georgia Senate Republicans unveiled a proposal Thursday that would let Georgians essentially opt out of federal health care reform.

The GOP senators said they plan to introduce a constitutional amendment during this winter’s General Assembly session giving Georgians the right to choose whether they want to enroll in any health insurance plan and prohibiting governments from punishing those who decide not to participate.

Georgia Shows the Way

The Georgia Public Policy Foundation says that the Congress could learn from Georgia's example:

Georgia became a national trailblazer this year, when the state allowed individuals to deduct 100% of their health insurance premiums from their state income taxes. Previously, only businesses could deduct the cost of health insurance. In "Health Care Policy Gets a Shot in the Arm,” the Foundation’s Kelly McCutchen urged the state to petition the federal government to follow Georgia’s lead “and eliminate this unfair bias once and for all." Instead the Democratic health plan would prohibit the sale of private health insurance policies, beginning in 2013, forcing individuals to purchase coverage through the federal government. (Section 102(c) of the 1,018-page Democrats’ bill).

For more, see the Georgia Public Policy Foundation.

Economizing or Grabbing Power?

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The Georgia Public Policy Foundation has a new commentary on health care policy, titled "hellish health reform." Ronald E. Bachman, a senior fellow at the foundation, says that it's all about power. For example, "Legislation stumbling through Congress is loaded with new controlling councils, agencies, boards, departments and other entities, all with the power to spread tax dollars around to cronies through 'planning and establishment' grants. The word 'grant' shows up 421 times in one piece of legislation."

A better alternative is the consumer-driven health plan, which, according to one actuarial group, can save 12-20% over traditional plans.

He adds, "If President Obama and Congress have ideas proven to control costs and improve the quality of care, they need to start by “reforming” the 50 percent of health care already under government control. They must show the country, employers and voters how to successfully implement health reform before the 180 million people with private health insurance – many of them voluntarily moving towards health-care consumerism – are forced to suffer the consequences of political maneuvering."

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