Sunday, November 13, 2016

Nationalized Health Care Regulation

Prior to ObamaCare, Insurance was regulated at the state level.

Sadly, state regulators tended to become the lapdogs of local insurance companies. State level regulations tended to align with the desires of insurance executives and not with the needs of the people.

I want to point out that this problem arises from the nature of health insurance. Putting all of our health care dollars in huge insurance pools creates powerful entities that can bully the state.

The US founders did not want an overbearing Federal government. This is why they created a Constitutionally limited Federal Government.

The founders wanted a system where the individual states could experiment with different ideas about local governance.

ObamaCare wrested control from the states and gave it to the national government.

BTW, the process of wresting control of an industry and giving it to the national government is called: "nationalization."

ObamaCare nationalized insurance regulation.

Repealing ObamaCare means denationalizing insurance regulation and returning it to state control.

Donald Trump's going on air and saying that he seeks to keep provisions of ObamaCare means that we will keep regulation of insurance at the national level. It also means that we lose the ability for the states to become laboratories of local regulation.

I did not jump on the Trump bandwagon during the campaign because I did not hear the campaign give specifics on health care reform.

The only specific Donald Trump gave was the idea that companies should be able to sell insurance across state lines.

So, lets jump back to the question of state regulation. It turns out that regulations dramatically affect the performance of a pool.

Lets say Nevada regulations said the maximum deductible was $5,000 and California set it at $6,400. A pool in Nevada would behave differently from  one in California.

The goal of selling insurance across state lines requires that the Federal government becomes the primary regulator of insurance.

This is why I was complaining before the election. Trump's statement that he would repeal ObamaCare was different from his statement that he wanted companies to be able to buy insurance across state lines.

I am really sad that things are turning out the way that they are. But the only way we could free market heatlh care reform is if people spoke with one another. But there is no way that this could happen in the current political climate.

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