The Individual States Are Laboratories To Determine The Best Policies

For whatever reason, the Republicans seem to have a problem keeping their campaign pledge to repeal ObamaCare. For some reason, they just can’t seem to bring up any one of the many bills they passed to repeal ObamaCare in the past when they knew the President would veto the bill. They are behaving like cowards. The problem is not the Freedom Caucus; the problem is the establishment Republicans who, like the Democrats, love bigger government. At any rate, the states have shown the way to repeal ObamaCare.

On Friday, Investor’s Business Daily posted an editorial showing how various states have dealt with various aspects of ObamaCare.

The editorial explains:

In the early 1990s, several states adopted “guaranteed issue” (which banned insurers from turning anyone down for health reasons) and “community rating” (which banned insurers from charging the sick more than the healthy).

As with ObamaCare, these regulations banned insurers from denying coverage or charging people more because they were sick. Like ObamaCare, these reforms were popular with the public.

And, just like ObamaCare, they all caused their individual insurance markets to collapse, as premiums skyrocketed and insurers fled the markets.

So what happened?

Of 10 states that adopted ObamaCare-style market regulations, four repealed their “guaranteed issue” and “community rating” regulations altogether, according to a detailed analysis by Milliman in 2012.

New Hampshire, for example, adopted these protections in 1994. By 2000, only two insurance companies were writing individual policies in the state, and by 2001, only 3% of the state’s non-elderly population were enrolled in an individual insurance plan, down from 7.6% before the reforms kicked in.

The editorial goes on to explain that when the regulations were repealed in 2002 and a high-risk pool created for those with pre-existing conditions, more people bought insurance. By 2010, 8.5% of the population were buying on the individual market.

The editorial cites a similar experience in Kentucky:

Kentucky likewise abandoned these protections six years after adopting them, and after making various modifications in hopes to get the rules to work. When Kentucky first imposed guaranteed issue and community rating in 1994, there were more than 40 insurers in the state’s individual market. By 1996, only one was left.

Iowa and South Dakota also ditched their guaranteed issue and community rating reforms within nine years of enacting them. Washington weakened its guaranteed issue provision in 2000.

The editorial concludes:

These states show that repealing blanket “guaranteed issue” protections is politically possible, that it will restore the individual insurance market to health, and that there are other, better ways to take care of the sick.

The free market works every time it is tried!

The government does very few things well. Right now I can’t think of any of them. I am reminded of the Milton Friedman quote:

“If you put the federal government in charge of the Sahara Desert, in 5 years there’d be a shortage of sand”

We need to keep that quote in mind when Congress talks about expanding government programs.