Ruminations, July 26, 2009

Insurance competition and healthcare

One of the proposals being floated for healthcare is to provide a government competitor for the insurance companies. With some 1,300 health insurance companies in the United States, one would think that there was plenty of competition out there to keep prices low. Is there?

Not really. We are in a kind of mess. It all started back in 1869 with the Supreme Court ruling in the Paul v Virginia case. In that case, the Court ruled that "insurance is not a transaction of commerce." If it was not commerce, then the federal government has no right to regulate it. That resulted in each state creating its own insurance regulations. Accordingly, not all insurance companies can write insurance in all states.

But wait. That lasted until 1944 when the Court overturned the Paul decision, saying that insurance was commerce and Congress could regulate it. The following year, Congress passed the McCarran Ferguson Act, stating in effect that as long as the states did a good job, the status quo was fine.

So, maybe a simple first step in revising healthcare would be to repeal McCarran Ferguson and replace the 50 state insurance commissions with one federal commission. That would mean that every insurance company could write insurance in every state. Of course there will be complaints but one of the main tenets of capitalism is competition and this would surely promote it – and consolidating 50 commissions into one would save money.

But, maybe that’s too simple.

Stupid like a fox

“Stupidity” is the term that President Obama used to describe the behavior of the Cambridge Police Department. If you haven’t been following the event, last Monday the Cambridge Police arrested black Harvard professor Henry Gates – the charges were later dropped.

During his press conference on healthcare Wednesday, Obama took an unrelated question on Gates/Cambridge Police controversy and said that the Police acted “stupidly.” Many have criticized the President for his injudicious choice of words or that he even got involved in the kerfuffle. Was it a poor choice of words or was it calculated?

Let’s go back to the purpose of the press conference – healthcare. In Congress, Obama seems to be losing on his healthcare initiative and not because of the Republicans but because of the Democrats. The Blue Dog Democrats (i.e., fiscally conservative Democrats) think that the proposals going through congress are fiscally irresponsible. How does Obama bring them back over to the Democratic majority? Maybe he thought that by galvanizing them on the race/police issue he could bring them back in the fold. Republicans, who more often than not side with the police, predictably reacted negatively to Obama’s inference of police stupidity — perhaps as Obama intended. Could it be that his thinking went, in a controversy, all the Democrats would all pull together behind him.

If that’s what the president calculated, it doesn’t seem to have worked. The uproar diverted attention away from healthcare, even dominating it.

Then, too, maybe we should take the president at his word, that he used a poor choice of words. The president said, “I don't know all the facts” and neither do I.

Fundamentalists

According to Merriam-Webster, fundamentalists represent “a movement or attitude stressing strict and literal adherence to a set of basic principles.” Often, when we hear the term, we assume that the fundamentalist in question is Christian, invokes a literalist interpretation of the bible and a rigid set of unwavering set of beliefs derived from the Bible. But, are Christian fundamentalists so different from the rest of us? Are we becoming a nation of fundamentalists?

One of the bones of contention involving Christian fundamentalists is that of how humans populated the planet. Christian fundamentalists are often pitted against Darwin ideologues. They often appear to be mirror images of each other: they each have their own book, and literal adherence to their basic set of principles. It’s an easy attitude to have when you feel that you are right and have the sources to prove it. Not only can you prove you are right, you can prove the other person is wrong. It has gotten to the point where many Christian fundamentalists hear the word “Darwin” and say – wrong. And it works the other way too; many Darwin ideologues hear the phrase Christian fundamentalist and immediately say — wrong.

Are we getting to the point where we hear someone of another party or political point of view say something and we immediately say wrong without an evaluation of what was said? Is Guantanamo wrong? Is healthcare reform wrong? Is gun control wrong? Is Halliburton wrong? It seems that more often people are calling the President, Rush Limbaugh, Republicans and Democrats wrong without the courtesy of hearing and understanding their positions.

Maybe our political opponents are wrong but summary dismissals don’t contribute to intelligent debate – or am I wrong?

Quote without comment

Economist John Maynard Keynes writing in the preface to The General theory of employment, interest and money, 1936: “Nevertheless the theory of output as a whole, which is what the following book purports to provide, is more easily adapted to the conditions of a totalitarian state, than [to]… conditions of free competition and a large measure of laissez-faire.”