By: Todd Wheatley
(c) IQ-2k   10-29-09

A bill concerning healthcare is finally ready for debate on the House floor. But given the state of politics today it seems much ado about nothing. The bill is both too early and too late. Not to mention unwieldy and expensive. Forget about congressional mandates, for the moment. This bill comes at the behest of the president. And even if a final bill passes, which it won't, the president will receive the accolades. Clearly no intelligent person would doubt that President Obama can walk and chew bubble gum. But while patting his head & rubbing his tummy? Greater effort should have been given to the economy -- in fact the Presidents focus should have been economy, economy, economy and cleaning up the wars. The people voted for change. Not patch, mend, visit, and talk.

Though as the saying goes,"the more things change, the more they stay the same."

Healthcare should have been started AFTER the mid-term election (if not later). AFTER solid congressional wins cemented change into the American heart. AFTER the country had been given the governmental transparency we were promised. AFTER spending had been reigned in. AFTER the economy established growth and not just "green shoots".

Fortunately the current over-reaching health care bill has come too late to find adequate support. Soon the mid-term elections will begin to fire and with the holidays coming no substantial effort will emerge. Regardless, the house bill would still need to merge with the current Senate bill. The competing bills would sent to a conference committee to produce one final bill for a comprehensive vote by both House and Senate members. Ultimately this is doomed to failure in the near-term, but the effort may bear some fruit.

After listening to the debate today one problem emerged above all: too many insurance companies. On the one hand some states have little to no competition, on the other, it is reported that upward of 1100 insurance companies exist to provide health care coverage. What about "economies of scale"? The major obstacle, however, comes from individual states regulating insurance. One idea allows the states to continue insurance regulation, but drops the ban for purchasing out-of-state insurance.

Ironically the debate on state insurance regulation is being compared with the 1980s financial deregulation. At that time a Supreme Court Decision (known as the Marquette Decision) gave banks greater flexibility in setting credit card interest rates. As a result banks flocked first to South Dakota and then Delaware in an effort to escape usury laws mandating interest rate caps. Though while credit boomed - so did interest rates and fees. Therefore given the huge credit industry migration it is assumed that insurance companies will flock to the state with the lowest consumer protection.

At face value it seems ideal. Insurance would boom and create economies of scale. Yet on the other hand, consider the healthcare equivalent of "universal default" look like? Unfortunately affordable healthcare grows more important by the day. The current underfunded mandates of the federal government will add crippling debt to an already overstreched budget, but poor timing, shifting focus, and over- reaching goals will kill the best opportunity healthcare insurance reform has ever had.


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