Heath Insurance Solution that Won't Work

By Denys Picard

I was listening again to Kellyann Conway this morning, in her defence of the Trump team. I will say before being accused of being misogynistic, that Kellyann is a very intelligent person and effectively Trump owes her a lot in his victory. Yet, Kellyann, while being a brilliant strategist, is also from marketing. And while campaign pitches are sales pitches, it is appropriate to engage in campaign debates with the tone of sales marketeers. But, the campaign is finished, and while Kellyann still has her place in the Team, Trump and other strategists must understand that on central changes proposed by his future administration and in the context that specifically little detail of anything emerged during the campaign safe large strokes on both sides; when addressing a subject as crucial as Health Care, and Health Care Insurance, Americans deserve more than a simple sales pitch before any law are presented to Congress. More specifically, since most sales pitches concerning Health Care Insurance from the Trump Team has the tired resonance of yet another Wall Street Financial Economic efficiency modeling effort, economy destroying, charade.

I had the opportunity, again, for a few laughs this week, when I read in a Canadian newspaper, the same old tune: "...the electors have spoken, it's now time for amateurs to get on the sideline and let the Pros take care of business". This was obviously a comment aimed at the US election, the voters and many staff members of the winning team. In fact, some of it, while not stated, was probably about Bannon serving in the Trump Cabinet. The pros, as even Canadian elite journalists consider, are Wall Street, established carreerists from the political sphere such as elected politicians, consultants, lobbyists, Think Tank experts, Main Stream propagandists, etc...and the amateurs are the voters and members of a campaign that shared a vision, an intelligence, a dream, etc...I guess we should all surrender arms immediately, since the Pros must be right, we know from recent decades how the Pros are always the best at everything and anything they do!

Now, when everything from Government is simply addressed as a sales pitch, then, Government stops serving and starts to imposes. Just take the health care solutions that are put on the table by the Trump Team currently. But first, I agree that Obamacare was an open disaster on too many fronts and I won't elaborate here because t is not the purpose if this article.

Now, currently, the only real detail we have from Team Trump is that they will repeal regulations of Congress, which saw their dawn thanks to the McCarran-Ferguson Act, that allowed for Congress to consider Insurance products as commerce, and to structure the nature of interstate Insurance commerce and which evolved as to not allow Health Insurance Commerce outside of any one State. This started as a measure to remedy an Insurance market that was largely fraudulent and exploitative, it has effectively, in many cases, created excessively small markets that have proven an impediment. It is currently perceived, by the Republicans, as the main impediment to a solid base for a good evolution of Health services and Insurance markets.

The nature of Health Insurance products do contribute to shape the manner in which products are developed, and services rendered. In this context, six years ago, there is one solution I tried to get traction on, yet most in the media and DC are so stuck up in their excessively polarized ethnocentric modeling, and I was quickly reduced to an illiterate for simply trying to participate in the debate. Yes, I am used to be called an amateur, and yes, it is what I am. And I do have a preference for when the Olympics were the Olympics...

Heath services and Health Insurance are deeply political. Health has always been a deeply political issue because of its influence on how we organize ourselves and our communities, how it carries a heavy load of both very positive and very negative externalities.

In this context, simply offering yet another Wall Street globalist solution..."we will eliminate the Borders, everybody will win...", will simply offer momentary economies of scales, give place to 3 to 4 years of fake competition, temporarily lower premiums, surely, until markets settle, consolidation and concentration matures in this new landscape...and then, all the structural problems that were not addressed, will re-emerge.

My solution was first to respect the Sanctity of the Sovereignty of the States. It was Congress motivation behind the McCarran-Ferguson Act. In competition, in this sense, the States should be the one chosing with whom, with which, other States they would like to associate to create a Market. But markets left to themselves do not always offer the best solution, this is an erroneous theoretical statement. They are no perfect markets, because all transactions are based on friction, it's a law of economics, thermodynamics, which was first observed in physics. The word efficiency is always ill-used in this context because when expressing the "perfection of bigness", it always makes abstraction of negative externalities dumped on other, often smaller and defenseless, parties. Since large States such as CA, FL, TX and NY have big enough markets, they don't need to cannibalize smaller markets to structure and offer good ones

Then, you have the cultural aspect, because Health is cultural. Should a person in Maine deal with an Insurance Company in San Francisco that may have phone personnel in India...No. In fact, the Affordable Health Care Act did integrate a clause dictating that phone services of Health Insurance companies could not be transferred to sites outside the US.

The pairing of players of equal forces has been a normal approach in preparing competitive bouts as long as we can remember. In sports, in life, in work...witnessing combats for status between uneven challengers is usually not a very interesting event because it usually carries little intelligence. A 25 years old boxer entering the ring to challenge a 5 years old; I would, preferentially, not want to witness this. When the Federal government extended its arm of regulation and asked the Supreme Court to consider Insurance transactions as Commerce, their idea was to protect the Sovereignty of the States. To respond to a market, the market for Insurance, that had become completely incompetent and fraudulent.

The Constitution states that overviewing interstate Commerce is one of the authorities of the Federal Government. The Federal Government therefore creates laws and regulations that structure this market. But it can also restrict the market for a service or product to within the borders of the State. This is what happened to Health Insurance coverage. A health Insurance business had to be resident of the state to sell coverage to those residents of that State. This is what Republicans want to repeal. And they believe that consumers will automatically get better choices and services. In this set-up, the State lose much power over that criteria that determine coverage, because many part of them will be dependent on Federal Laws. And corporations, living out the States, will dictate the structure of Health Care Services and Products.

Since cultures are local, regional first, before being national, and that much of the current political debate centers around the axis of the small and against the large, the local and the global, maybe everyone should take a few seconds to breath. Maybe States could establish larger markets in local regions. But we do NOT want the many localized health markets of the many States to be subjected to the same Schumpeterianesque Tidal Wave that globalization effected on the Steel belt and left it Rusted in abandon.

Let's say Maine suffers from its low density population, associating it, in terms of Insurance health market, with a state like NY may simply give rise to temporary low premiums, but in exchange for what? For Maine losing jobs to NY which will, as always, rationalize and consolidate. If so, what will be the long-term gain to Maine, not that great. How will the Maine Government , in its desire to structure its own health care space, get signals and negotiate with corporate behemoths who will enjoy revenues many time greater than the States budget? But if we allow States to associate only with other States with which they share a Border, a Time zone, for example, and somewhat of a window of Population spread and Government Revenue, then you allow consolidation in which States preserve their ability to shape their Health Care markets, because forces and powers are better paired, and you Consolidate regional economies, which in the long-term is Beneficial to regions and to the Population of these regions.

For example, Maine could decide to associate with NH, VT; and Massachusetts could associate with RI and CT, etc...States could be limited to form 3 or 4 or 5 State clusters but not more. The idea is to allow for intelligent consolidation of regional economies that serves the prosperity of the Sates and their people. But New York could not associate with other states, nor could Texas, Florida or California. Markets left to themselves will give place to complacency, corruption, idiocy, vanity of Government officials, of the Elected, and of Gigantic Insurance Corporations. We have seen this played over and over and over again.

Health is a principal factor of the economic political landscape. In such, dissociating it from its core economies without concern for the Sovereignty of the Many States is robbing the vision that was enshrined in the US Constitution. States have a status to maintain, defend, increase, exactly like human beings, States are in a Quest for Status, and as such need rules of Competition that offer and allow them a fair chance to better themselves.

Naturally, it is my idea, I think it's quite good, but obviously, for now, no other person with a status greater than my own appear to share my enthusiasm for it. To play on Twain, "the rumors of the Death of my ideas are quite understated".

And since you have finished reading, I can now state proudly that I am, in fact, misogynistic...but don't worry "ladies", I am also a Misanthrope.