Legal Commentary

As I observed earlier, I do not think much of the Shadegg-DeMint Health Care Choice Act as a method of letting consumers choose among state regulatory systems. But there are other federalism-based proposals out there for promoting healthcare choice that make a lot of sense. One of the best is the "single-license" proposal by by Henry Butler and Larry Ribstein. Unlike the Shadegg-DeMint bill, the Butler-Ribstein proposal would permit states to override contractual through an express act of the state legislature -- a critical difference that preserves state legislature ' powers to adopt redistributive or paternalistic regulations if they are feeling "blue" about the inefficacy of insurance markets. At the same time, the Butler-Shadegg proposal would allow insurers to exit an aggressively regulatory state by making the legislature's override effective only as to policies sold within the regulating state after the overriding legislation is enacted. In effect, state legislatures could be aggressively regulatory -- but they'd have to pay the price in terms of lost insurance business.

The Butler-Ribstein proposal is so much more sensible than the single-license scheme that the Republicans actually sponsored that it is worth asking why the latter ended up being the official Republican position instead of the former. One guess is that the Republican Party really suffers from a dearth of interest in ideas nowadays. The insurance industry does not like mandated benefits, so the Party obliged them by pressing for a scheme that would get rid of them, and federalism be damned.

But why would the insurance industry insist on a bill that had no chance of escaping committee by winning Blue Dog votes? Could it be that the business interests have lost their healthy sense of political self-interest and are wasting their energies on ideological purity over practical results? If so, then it is a sad day for conservatives, who have always counted on greed to rescue us from the excesses of idealism.