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  • Killing Federalism in Health Care

    As Senator Orrin Hatch (R-UT) said at an event on health care reform yesterday at the Heritage Foundation, “There is no such thing as a free lunch—especially if Washington is the one having you over.” Democrats continue to insist that the best way to reform the health care system is to centralize decision making and regulation within the federal government. Not only is this inaccurate, but it also goes against the same principles supported by the Constitution that House Speaker Nancy Pelosi flippantly dismissed at a recent press conference.

    Health care is too complex and intricate to micromanage at the federal level. The best, and most constitutional, way to enact reform would be to set the framework for change at the federal level and then allow decision-making and implementation to be determined by the states. This is in accordance with the federalism employed by the founding fathers in molding our nation into a democratic republic. The founders recognized the limits inherent in political power, thus specifically limited the power given to the federal government by the Constitution. As former Congressman Thomas Feeney writes in a recent paper:

    The national government, under the Constitution, is responsible for the general concerns of the republic; the state governments are the custodians of the people’s trusts and are authorized to address their particular concerns. This is the essence of federalism.

    An example of federalism at its best is the health care reform currently being implemented in Utah. Utah is launching a new health exchange operated by just two state officials, adding little to no cost to the taxpayer. The exchange is accompanied by a defined-contribution system, which allows employers to make contributions to their employers’ choice of one out of 66 plans in the exchange. Couples can combine their employers’ contributions, and since plans purchased in the exchange qualify as employer-sponsored benefits, participants are protected from discrimination based on pre-existing conditions. Lastly, independent risk-adjustment prevents insurers from cherry-picking healthy individuals. These and more changes to come will increase accessibility, portability, and affordability of health care in Utah.

    Utah’s efforts prove that states can get health care reform right if the federal government simply gets out of the way. Conversely, Democrats’ tactics would amount to a Washington takeover of health care, and would, as Feeney writes:

    …trample on the traditional preeminence that the states, under current law and the Constitution, have long held in enacting and improving the regulation of their very different health insurance markets.

    Washington lawmakers should make changes at the federal level that make it easy for other states to follow Utah’s lead, allowing states to tailor reform to their specific needs and to learn from each others’ failures and successes, thereby determining the most effective means of reform.

    Kathryn Nix currently is a member of the Young Leaders Program at the Heritage Foundation. For more information on interning at Heritage, please visit: http://www.heritage.org/about/departments/ylp.cfm

    Posted in Obamacare [slideshow_deploy]

    7 Responses to Killing Federalism in Health Care

    1. J.C. Hughes, Texas says:

      Very well stated Kathryn. Bravo Zulu. Yours is an excellent article that looks beyond the unnecessary and improper shell game being played out in congress.

    2. Roger S., Ma. says:

      Utah is working hard to prove this can be done well — and at this time it looks like they'll make a success of it.

      Likely emulation at the Federal level? — Don't bet on it! — Why not? — No entitlements!

      Washington has for a very long time now been into the "entitlements game", meaning: if you can't "pork it", it's no good! As proof I need only offer the size of their "bills" — pun intended — a billion per page seems to be the current rate!

      Entitlements are to Washingtonian politics what sex is to advertising: It gets the viewers' attention, then lures him with false hopes to buy a product he doesn't need, to impress people he couldn't (or shouldn't) care less about, while filling the till of those who care even less about him.

      Doesn't that sound like the recipe for "bringing in the vote"? Well, it does to me! Entitlements do differ, however, in one big way: while the money spent would seem as virtual as the sexy image, and the ensuing control is just as real, in politics the money is other peoples' and the product can never be returned, and even the "used" market has few takers. I'll wager that Washingtonians "bank on that" — again, pun intended!

      Voters seem to be learning (and will need to remember) that it was their money before someone else took it to spend in "their best interest"! — Say again, "whose BI"? My point, exactly!

      Let's keep our fingers crossed for Utah and (hopefully) many emulators!

    3. Gary Gress says:

      Insurance is successful because it is an essential service. It's success depends on having a large enough risk pool to cover losses at a premium level the insured is willing to pay.

      It seems to me that the problems of accessibility, portability, community rating, pre-existing conditions and affordability can all be solved by forming several giant risk pools. What are the barriers to this being accomplished either through cooperative pooling among contiguous states, or a national rate and product competition to see which health insurers will be the oligopolists authorized to run these necessary pools?

      The states would have to drop their coverage requirements in order to allow the bidding health insurers to offer a range of coverage options at different price points. Their role would be reduced to policing fraud. Many insurers would have to leave the health field, causing unemployment (but the gigantic winners would be hiring). The Feds could theoretically eliminate all of Medicare and Medicaid, allowing premiums in the large pools to drop. Tort reform would get rid of defensive medicine, and drugs, eye, mental and dental care could be included.

      Where am I wrong on this? I'd really like to know as I'm a senior who will be profoundly effected by new legislation?

    4. Gary Gress, Chicago says:

      Sorry, forgot to enter my location.

    5. Roger S., Ma. says:

      Gary, you're quite right. Absolutely, totally, right. What you describe is how things should be.

      The Utah model, were it to be expanded beyond state lines, would end up very much like this.

      The problem is Washington, meaning the interstate commerce clause would be used to regulate things so that "big government" gets its "cut".

      As in my comment above, Entitlement is key, because it's the only means they have to "sell" your stash to "buy" their next votes and gain the control needed to be able to repeat this process, ad nauseam, and if necessary right into bankruptcy, yours, ours!

      The alternative is to leave these things intra-state entirely. Should this work for a relatively small state like Utah, then it could presumably work anywhere. Other states would likely emulate it. And, the costly "Fed", who can't even run the Post office efficiently, could be out of it for keeps. To me, that's a real hope, not the nightmarish Obamacare.

      BTW, I think they're aware of this and that it's their last chance for some "real" control plus a guaranteed future income, as well as not having to deal very soon with the Medicare/Medicaid accumulated debt nightmare, which is why all stops are being pulled. Let's hope they lose!

    6. Pingback: House Demands Will Make Obamacare Worse | The Foundry: Conservative Policy News.

    7. Pingback: Making a Bad Bill Worse | Step Down Obama

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