Passing universal single-payer federal health insurance legislation has been the political ambition of many influential politicians for decades to no avail. It strikes me, upon a little reflection, this is by design (of our Constitution). The Reserved Powers clause of the Tenth Amendment, given no prior stipulation of the federal government’s authority to tax for and provide health insurance. A reading as such should be interpreted to be reserved to the States to solve the issue in a fashion that protects their rights to fashion a law appropriate to their specifics circumstances. Little attention has been paid to the attempts several states have made at providing health coverage. Hawaii is one notable state that does have a “public” option. But their are many other liberal states which would likely support single-payer systems, so the question becomes, if not, why not? The answer I believe is two-fold, but first a history lesson.
Why is it today that the typical pooled risk group through which health insurance coverage is purchased is one’s employer? The system arose during WWII when the federal government imposed wage restrictions and price controls. So, firms, knowing they must provide a compelling reason to attract and retain top talent began providing perquisites which were not regulated by the IRS, one such instance was health insurance. Note that the same tax exempt status of health insurance and other perquisites still remain today. Naturally firms will maintain these attractive features because it is cheaper to provide them on a pretax basis. In essence health insurance through employers exists today for two reasons, its inception was spurred by artificially imposed wage rigidities and remains because of tax avoidance strategies. Other pooled groups could otherwise be formed to solve the adverse selection problem such as schools, churches, unions, knitting clubs, etc.
But why haven’t states been able to solve the issue at least where it has a high degree of popular support. Alas, many have tried, but have failed not for lack of legislative support, but because of federal legislation which “preempts” states rights. States such as California, Colorado, Michigan, and Minnesota have all attempted legislation which levies a payroll tax to effectively create an assigned risk insurance pool. Sadly, another breach of the Tenth Amendment has nullified such laws. Section 514 of the Employee Retirement Income Security Act of 1974 (ERISA) has been the avenue by which corporations have appealed to the federal circuit courts to intervene on their behalf. Hawaii is the only state other than Massachusetts which has state level health coverage, to the best of my knowledge. Hawaii is able to provide coverage because their system was set up before the 1974 legislation and is hence grandfathered. Massachusetts has a barely workable system because the fee charged to employers who don’t provide coverage is so nominal they have not banded through collective action to challenge the legislation under s.514 of ERISA, but if they did they would likely be successful in getting it overturned.
I would like to provide for an assigned risk pool coverage option so basic health coverage can be afforded by all, even if I have to subsidize coverage for others, for the same reason I support the socialized provision of fire departments. I believe, when poor and rich alike are treated for communicable diseases and other basic health problems everyone benefits, call it an externality if you like. My bigger beef is the solutions best suited for different states are likely very different in form. Washington state for instance has a relatively youthful population, lower rates of smoking, higher rates of physical active people. Washington state probably needs more sport medicine doctors to keep active people active, something a federal cookie cutter approach likely would not recognize. On the opposite end of the spectrum, Ohio probably needs more dietitians and smoking cessation specialists given high rates of obesity and smoking.
I want to cover several additional topics and will do so when I have the time:
-the market efficiency of high deductibles
-ending federal corn subsidies as a method of improving health and the consequent overproduction of corn syrup
-The competing “public option” as a violation of 5th amendment’s contravention against deprivation of private property with due compensation