Freedom Line Blog

Yesterday, 60 members of the House Republican majority endorsed a bill that would “deregulate” health insurance purchases by allowing consumers to buy plans across state lines.  The idea is to let companies compete on a national scale, spreading the risk and lowering premiums.  The bill is gaining support as a free market counterargument against ObamaCare’s one-size-fits-all regulation of health insurance.

There is a caveat.  In order to liberalize the insurance market, the GOP-sponsored bill must take away the states’ power to regulate insurance.  The reason insurance plans cost different amounts in different states is because individual states have different regulatory schemes.  Those schemes are the product of public policy decisions hammered out at the state level.  Importantly for 10^th Amendment limited government types, the plan to “deregulate” the health insurance market comes at the expense of state sovereignty.

Ironically, the only way the House Republicans’ answer to ObamaCare gets passed is through an expansive reading of Congress’ ability to regulate interstate commerce “among the states.”  Members of Congress will (or at least should) have to struggle with which conservative principle they value more in this instance: the free market or federalism.  In a certain sense, federalism grants to states a public policy monopoly over all issues not expressly contained in the text of the U.S. Constitution.  That monopoly drives up prices for consumers in states with costly regulations.  Theoretically, if people want to pay less for health insurance, they could move to a state with less costly regulations.

Ideas like federalism have consequences.  As the Tea Party-flavored House GOP boards the ship of state, it will be interesting to see which crate of principles the revolutionaries toss over.

H/T: Los Angeles Times