There are good reasons not to allow interstate competition unless some drastic changes are made. .... Now I can see this becoming less of a concern if the federal government steps in to fill the regulatory gap.
Unless I'm missing something, this strikes me as a very 'strained' response. I don't see why this is characterized as a "drastic change". It seems much less "drastic" than going 100% single payer. We have many, many federally regulated areas now, and some of them seem to work reasonably well. I'd prefer car safety tests (for one example) to be federally regulated than state regulated by 50 different agencies.
Insurance is a fairly complex beast, so yes, I think that the feds would need to step up to the plate with some regulation. I would like to see 98% of that regulation be in the form of 'transparency' (standardized terms, some standardized plans, plus options). It should be made fairly easy for people to know what they are and are not getting for their dollar. Help them make an informed decision.
It is somewhat like state usury laws. They became close to meaningless when a credit card company based in South Dakota was allowed to market cards to people in any state. South Dakota had no or very high interest rate limits and other states' usury limits became meaningless.
That one falls on deaf ears for me. I don't think we should have usury laws any more than we should have laws that say you can't pay more than $X for a piece of artwork, even if it was done by Picasso. The terms should be standardized so the buyer knows what they are purchasing (the time value of money in this case), then it is a contract between two entities.
ERD:--When thinking about competition you could say the individual insurance market is highly competitive--they compete for the youngest and healthiest and you can get a pretty cheap policy if you meet those requirements.
That's not competition, that is target marketing. No comparison. Look at Axelrod's statements - one or two players in many states. A duopoly is not competition.
How do you foster competition for customers no one wants? Currently, the mostly unregulated individual market say phooey, we will underwrite and you won't be our customer unless you are healthy.
This is separate from the first simple step of going national with Health Insurance. Those customers are not being pursued by companies under state regulation either. But separate from that, we've discussed this solution before - you eliminate underwriting. And you can do that by giving everyone a voucher, and let them choose public or private plans, whichever is giving them the most bang for the buck.
I probably won't have time for a while, but I've been thinking of starting a thread on "Baby Steps for HC Reform". Nationalize ins first, maybe step two is that once you are in a group plan, you cannot be dropped even if you quit or change jobs (you need to keep paying the same group rates), drop the tax benefits for employers to level the field, and a few more steps I haven't thought out yet. But I think a public option that was true pay-as-you-go could fit in that if it looked like it was needed to keep the ins cos in-line, but I suspect that real competition will do that.
-ERD50