March 1, 2016
When pressed during last Thursday night’s campaign debate in Houston for details of his proposed plans for replacing Obamacare after it is repealed, presidential candidate Donald Trump (?-NY) once again sputtered out something about eliminating “those lines” that states draw in regulating health insurance. What that exactly means involves some Trump Land-to- Policy-World translation, and a little primer on what’s usually understood and misunderstood in this area of health policy.
What’s Behind The Donald’s Proposal?
Trump appears to be borrowing some of the language behind a traditional conservative Republican health reform proposal, which involves facilitating competition in health coverage through the sale and purchase of insurance products across states. It’s sometimes referred to as interstate competition or competitive federalism, or even just “consumer choice.” The origins of this proposal have a history of almost 15 years. Some business groups in the small-group market started floating the outlines of this idea in 2001. I wrote the first draft in policy terms at a Cato conference in July 2001, and subsequently published the academic-style version in the Cato Journal the following year. Then-Rep. Ernie Fletcher (R-KY) proposed the first legislative bill on this front in 2002. Subsequent tweaks to those concepts on Capitol Hill were championed by then-Rep. John Shadegg (R-AZ), and, in later years, by Rep. Tom Price (R-GA) and Rep. Marsha Blackburn (R-TN). Presidential candidate Ted Cruz introduced a bill similar to Blackburn’s in the U.S. Senate.
Before oversimplifying the evolving policy proposal a bit, let’s acknowledge that producing a legislative product inevitably deviates from any initial policy concept. However, the starting premise was that competition among different states in how they decide to regulate health insurance might be harnessed to provide broader choice for consumers in the insurance products they can select. A rich academic literature on regulatory choice and competition among different state-based regimes already included the pioneering work of Roberta Romano of Yale in analyzing the history of Delaware’s dominance in corporate charter regulation, and later adaptation by Larry Ribstein of the University of Illinois to suggest new policy frontiers for jurisdictional choices. One could also sprinkle in a dash of Charles Tiebout’s classic analysis of how competition among local jurisdictions allows citizens to match their preferences with particular menus of local public goods. So this wasn’t a new idea, but more of an extension of earlier work in other fields of law and economics.
Read the full article at Economics 21: The “Blurred Lines” of Trump’s Health Plan (He Knows You Want It)