Idaho Governor C.L. “Butch” Otter and his insurance commission just did something that’s likely to give leftists palpitations.
They’re allowing a little more freedom for health insurance companies doing business in the state, and their move is not a moment too soon.
According to the Associates Press’ Rebecca Boone, who seems to be frustrated by the policy, Otter and his Insurance Director, Dean Cameron, have announced a plan that would allow health insurance companies to sell less expensive insurance packages that don’t have to follow all the glorious, world-saving Obamacare mandates the GOP left in place when it “revised” the noxious and unconstitutional law last year.
Of course, Boone uses slightly less normative language:
Concerned about soaring health care costs, Idaho on Wednesday revealed a plan that will allow insurance companies to sell cheap policies that ditch key provisions of the Affordable Care Act.
Despite her depiction of it as leaving people with balsa wood insurance, this move is a good thing. In fact, this is one of the most significant actions any state government has taken since Barack Obama signed the so-called “Affordable Care Act” into law in March of 2010. And it had to be taken because the majority of the federal GOP either does not have the guts to toss out the unconstitutional, unethical, and counter-productive mandates on insurance companies, or the majority does not understand fundamental economics and the Constitution itself.
This has been a long time coming, and might be just the start of more state pushback against unconstitutional federal encroachment.
See, for years, collectivists have conducted their push towards a federal single-payer system for virtually all health care in the US. The core of this strategy has been to force onto insurance companies what are called “Guaranteed Issue” and “Group Rating” mandates. Guaranteed Issue forces companies to issue health insurance even after an applicant has already manifested a medical liability – thus making it something other than insurance. Group Rating forces insurance companies to shift what would normally be higher premium rates for older, likely sicker people, into “pools” of age categories, where the people between certain ranges all pay the same rate. Essentially, it discriminates against young people and, like “Guaranteed Issue,” it inspires young people to wait. They get “health insurance” after they get ill.
And please take note of the word “force” in both of those actions. One of the essential aspects of these kinds of mandates, which were pushed in numerous states thanks mostly to Democrats during the 1990s and then mandated federally in Obamacare, is that the politicians are not willing to make the effort to start their own insurance companies to offer the kinds of policies they command business people offer. They simply tell other people how to run their businesses. Nice, huh?
Not only is this unethical, it runs counter to the U.S. Constitution’s “Contract Clause,” which stipulates that no state legislature can pass a law that prohibits the fulfillment of a previously agreed-to contract. Many of the 1990s state-imposed “Guaranteed Issue” and “Group Rating” laws did just that, forcing insurance companies to change their rates and their policies – rates and policies for which they and their clients already had established contracts.
And the practical effects of mandating that insurance companies accept people with preexisting conditions and mandating “Group Rating” are that young people wait until they get ill before they buy their insurance. Like homeowners who know they can get fire insurance after their home burns, they wait for the event, save money, and pay other bills. This has the tertiary effect of removing what is called “clean” money (premium payments from healthy, young people who rarely make claims) and leaving insurance pools filled with costlier, older patients, thus driving up rates. As those new rates are exposed, the higher prices inspire more young people to drop policies, and the effect spirals upward. People find their policies unaffordable, and they blame the insurance companies, which were merely responding to the change in costs created by the political mandates. And to whom did collectivists correctly anticipate many Americans would turn to stop those hated, “money-grubbing” insurance companies?
The feds, baby.
So the false “compromise” that the Dems in D..C made when “negotiating” Obamacare (they passed it without reading it, and without letting the public see it) was that they would not only force insurance companies to sell policies they designed, they would charge a fine (actually a tax reported to the IRS) if citizens of the Orwellian US didn’t buy the policies.
Raise a toast of Victory Gin for the genius of Big Brother.
But the Dems kept the tax/fine lower than it would cost young people to buy yearly coverage, so it didn’t act as a disincentive for young people to just get insurance after they got ill. It didn’t stop the key lever the collectivists have been using to keep rates skyrocketing.
Idaho’s move is important because, while the GOP-controlled Congress and Senate removed the mandate for people to buy policies, they did not remove the mandates for “Guaranteed Issue” and “Group Rating”. Unless those mandates are removed, the price spiral effect will continue, as young people keep staying away from expensive health insurance until after they get ill.
This is federalism in action that could save people money and actually save the insurance industry in Idaho. And it’s push-back like what some leftists applaud when it comes to states defying Trump’s immigration policies. But will leftists be consistent and applaud it?
We can easily guess the answer.
(Cover Photo: TaxRebate.org.uk)