I don’t know when (or if) The New Republic will make it available to non-subscribers, but Jonathan Cohn has a fascinating look this week on Rep. John Shadegg’s (R-Ariz.) Health Care Choice Act (via Kevin Drum). Considering the right’s general hostility to almost every proposal to reform the nation’s health care system, this legislation is noteworthy, if for no other reason because conservatives have rallied behind it.
As Cohn noted, the Health Care Choice Act has been praised by everyone from The Wall Street Journal editorial page to the Cato Institute to House GOP lawmakers. The White House is on board, as is the Speaker’s office. So, what’s the substance behind the bill? It’s surprisingly straightforward.
Right now, people who buy their own health care can only do so within their own state, which sets specific standards for insurers. The Health Care Choice Act would do away with this system altogether — you could purchase health insurance from any state, regardless of regulations and/or standards. Competition, proponents say, would rule. But who would benefit?
Ideally, the bill’s supporters say, people would shop for insurance the same way they shop for consumer goods: online, comparing products and prices, and then deciding on the package that best suits their needs.
Lovely — except that health insurance isn’t just another sweater you can return to L.L. Bean if it arrives with holes in it. In the wide open insurance market that Shadegg proposes creating, consumers won’t have somebody to warn them if they are about to purchase a defective policy. Just ask the people left owing $250 million in unpaid medical bills because they had purchased fraudulent insurance policies in the small-business market (which is prone to the same problems as the individual market). Among the well-publicized cases were a man in Georgia who had to declare bankruptcy and a former race-car driver in Florida who died after he couldn’t afford a bone-marrow transplant. In both cases, the beneficiaries had been duped into buying insurance from unlicensed carriers that seemed completely legitimate.
Lately states have tried to clamp down on fraud; Florida, in particular, became aggressive about monitoring health insurance after the race-car driver’s story made headlines. But allowing companies to market policies out of state would flood consumers with new options, overwhelming the regulators, many of whom already feel undermanned in the fight against scam artists. There would also be a “race to the bottom,” as even the legitimate insurers would flock to the states with the most lax regulations about solvency and marketing practices, much as credit card companies now flock to Delaware because of its minimal oversight and taxes. Even in those states determined to be vigilant, this move would render local rules on health insurance irrelevant.
The regulations states put on insurers protect consumers, so Republicans are trying to undo the regulations.
Cohn put all of this in the context of the alleged Republican love of “choice.” When it comes to cutting funds for public education, the right says it’s part of a drive for “school choice.” When it comes to protecting Social Security and Medicare, the right says privatization would produce “choices” for retirees.
On the substance, these arguments are a fraud and would do nothing to improve education, retirement security, or care for the elderly, but the claims fit comfortably into a right-wing worldview. In contrast, when it comes to the existing health care system and proposals like the Health Care Choice Act, Cohn explained what real “choice” would look like.
But the best way to fix this isn’t to gut existing regulations. It’s to create one big pool of beneficiaries through some kind of universal health insurance system — whether it’s one that allows people to pick from among well-regulated private health plans (like President Clinton once proposed) or one that simply bypasses insurance companies altogether, giving consumers direct, affordable access to the doctors and hospitals they like best (like many European nations already do).
How about these choices, GOP?