Health care and justice: Reply to Sasseen

Your understanding of the health care debate is truly comprehensive and thoughtful. We must always be concerned with both individual rights and the common good. You have shown the way to deal with the present crisis in a way that is consistent with the Constitution and distributive justice. I do wish to make a few points. First, whatever the requirements of the common good, the constitutional question is crucial. That is, we are a people in virtue of the Constitution, which has formed our habits and shaped our character. These have contributed mightily to a market economy which not only distributes goods and services more efficiently and more abundantly than any other society, but has aroused expectations and even enriched and thereby empowered government agencies. We now desire universal health care because we have gotten closer to it than would have been possible in the market economy's absence. We are enduring the crisis, if not the revolution, of rising expectations.

Socialists can only dream of redistributing the wealth in the presence of the hated capitalistic system that generates massive wealth to redistribute. The socialists' quarrel with capitalism is not over its productive capacity, which even Marx more than acknowledges in the Communist Manifesto, but over its alleged failure to distribute the profits fairly. We need to be sure that, in dealing with the present difficulties, we do not "kill the goose that laid the golden eggs." That may sound trite, but we are talking about preserving our constitutional system that has brought us so many economic as well as political and social benefits.

The fact that private health insurance covers so much more than homeowners' or automobile insurance indicates just how much our expectations have been aroused. Home and auto insurance covers calamities beyond the normal or "daily recurrent needs of the household." Health insurance seeks to cover practically everything related to health, including routine office visits. More than this, the government, through Medicare and Medicaid, does much the same. The result is that most of us make health care decisions on the expectation that someone else will pay--at least directly--for them (even if we pay in the end through premiums or taxes).

We are acting less like self governing citizens of a free republic than like wards of the corporate and bureaucratic state, however benevolent. Proposals to micromanage this already socially generous system or even to replace it with a government bureaucracy threaten the constitutional order which made this generous health care financing possible. This restraint takes the form of many citizens' manifest preference for practically anything but what Democrats are now proposing, which is to scrap the free market in health altogether. Our regime made us what we are, including our generous and advanced health care.

My second point concerns the dynamics of democracy. Our constitution was established to temper and moderate the demos as much as possible, consistent with the equality and liberty sought by our people, and the authority of the majority to make public policy. While it is certainly true that democracy, in some sense, always threatens our delicate constitutional order, it is also true that in the public mind (perhaps not in the "theoretic politician's" mind) our country is not merely a democracy.  Citizens cherish constitutional restraints and protections no less. I think it remains rhetorically effective, as well as true, to appeal to the Constitution as the source of our political prosperity and not merely to defer to majority rule or to acquiese in its ultimate triumph over constitutional restraints.

The Republican party is the institutional vehicle for keeping us true to our national heritage, and it is currently doing as good a job of defending us as can be expected under the circumstances. The Democratic party, or what its founders called the Democracy, is the enemy of constitutionalism. To the extent that we Republicans make that case, we make the case against unrestrained democracy. The rule of law includes a healthy and free marketplace and not just the formal laws that govern it (not to mention the infinitude of bureaucratic rules that burden it).  That is the meaning, I believe, of your distinction between regulating commerce and managing it.

Finally, however much Hobbes and Locke have in common on the state of nature and the state of civil society, their starting and ending points differ. Because the state of nature for Hobbes is "solitary, poor, nasty, brutish and short," he opts for a monarchy over a democracy to govern it. He does leave the door open in theory to a democracy, but few readers of Hobbes believe that he has high hopes for it. On the other hand, for Locke the state of nature is "inconvenient," with all sorts of unresolvable disputes that require a settled, known law to adjudicate them. His preference for democracy is not only not theoretical but explicit, and the king is reduced to a mere executive with some but not all of the monarchical powers. In short, warlike mankind needs a monarch, according to Hobbes, whereas squabbling mankind requires a large element of self government through democratic institutions, according to Locke.

Locke, if he does not prescribe duties at least makes it far more likely that men will freely assume them because they are free to accumulate goods and therefore more able to provide for themselves and others, and even to support a government without being excessively burdened. This is another way of saying that the limited government and market economy that Locke did so much to foster satisfies the demands of the common good very well indeed.

We run the risk of "throwing out the baby with the bath water." Preserving our constitutional system is the key to maintaining our public health.

Is health reform a matter of justice?

(Author: Robert F. Sasseen) Is affordable healthcare for all a question of individual rights, or a requirement of the common good? The public debate in the US seems to assume that it is both. It is not my purpose here to examine what reforms are necessary or wise, but to identify some of the issues of justice implicit in the debate Is There a Natural and Individual Right to Health Care?

Most believe that the US healthcare system needs reform. Why? Because it has become too expensive and too many are left out. All seem to agree on that. So the public debate is focused on how to fix the system, not whether it needs fixing. It is asserted that 46 million Americans do not have access to health care. Strictly speaking, that's not true. Millions of them could, but choose not to purchase health insurance. But let's not quibble over the word "access." In the USA, the door to health care is open to all in the sense that no law prohibits entry to anyone. It remains open even to those who choose for whatever reason not to enter. But isn't the door effectively closed to all who choose not to enter because they can't afford to pay the cost of the care available inside the door? Don't they have an individual and natural right to the care they need? If every individual is by nature entitled to affordable health care as a matter of individual right, then is it not the duty of government to make sure that health care is available to each and all? Indeed, this is the view of some who argue for a national healthcare system established, managed, and regulated by the Federal Government. They argue that it alone is big enough, powerful enough, and wealthy enough to provide affordable (and equal?) health care for everyone.

A question of justice arises with respect to things to which I am entitled by positive law, natural right, or divine command. If there is no entitlement , my lacking a good I desire (say, a room with a view) is not an injustice. Nor would it be just to tax another to pay for that room. But what of life's necessities? Am I not entitled to food, clothing, shelter, education, and healthcare? If so, doesn't justice require that another help provide them for me, at least if I am a child, or poor and destitute through no fault of my own?

Perhaps. But first, what is the ground of that entitlement? No question of an individual right arises if there is no entitlement to the good which is lacking? Some believe that my entitlement arises from my natural right to life, liberty, and the pursuit of happiness. If I have a natural right to life, do I not also have a right to the things necessary to preserve my life and to achieve the happiness I naturally seek ? Is that not logical? Seems so. But how does my right become another's duty to help me?

Classical Liberalism (e.g., in Hobbes and Locke) struggled with that question, not quite successfully in my opinion. In that view, the duty of another to assist me arises from the transformation of my natural rights into civil rights through the "social contract" and the laws established by a legitimate government to maintain the "state of society." In the "state of nature," there are no natural duties arising from my natural right to seek the goods I need. My natural neediness is not the ground of another's duty to help me. My natural right to acquire the goods I want leads to the war of each against each. The goods we need are naturally scarce, there is no natural law, and no executive power capable of enforcing it if there were such a law. I am not naturally my brother's keeper. Thus life in that state of nature is "solitary, poor, nasty, brutish, and short." The purpose of the "social contract," and consequently the duty of government, is to put an end to that war and to establish the conditions, (primarily law and order), which are necessary for the security, peace, progress, and prosperity of society as a whole.

St. Paul once admonished the Thessalonians that "if anyone will not work, let him not eat" [2 Th. 3.10]. Fathers once admonished their children that "the world doesn't owe you a living. Neither does your neighbor. It is your responsibility to provide for yourself and your family." That was a salutary teaching consistent with the harsh facts of life, the natural rights teaching of our Declaration of Independence, and the preservation of freedom and limited government in a democratic republic.

Is Affordable Health Care a Requirement of the Common Good?

What about all those who can't provide life's necessities for themselves? What about the "widow and the orphan," the poor, the handicapped, the disabled, the defeated, the downtrodden, the "marginalized," and all those who suffer "the slings and arrows of outrageous fortune"? If they have no natural and individual right to health care, are they to be left to suffer and die?

Of course not! Compassion forbids it, as does Charity. But compassion is not a virtue, and charity is not the same thing as justice. The "Good Samaritan" aided that particular victim. He did not organize a political party to demand that government create a program to aid all victims everywhere. It is good for society to foster the development of compassion, charity, and the cardinal virtues in its members. But the question we are exploring is whether universal health care is a requirement of justice and therefore a duty of government to establish and to guarantee. Government may have that duty. But according to the originators of the modern natural rights doctrine, its foundation is not in the natural right of needy individuals to life, liberty, property, and the pursuit of happiness. That duty, however, may be inherent in the nature of society and the purpose government."

Now we wish to consider whether the provision of affordable health care for all is a requirement of the common good.

Essential elements of the common good are succinctly stated in the Preamble to the Constitution of the United States: Its purpose is "to form a more perfect union, establish justice, insure domestic tranquility, promote the general welfare, provide for the common defense, and secure the blessings of liberty to ourselves and our posterity." Health is a good thing. Sickness is a bad thing. We naturally seek the first and wish to avoid the second. Health care is necessary for both. My own health is my private good. A healthy population is a public good. An adequate system of health care open to all is a common good, part and parcel of the general welfare. It is therefore a proper function of government to promote its establishment and to govern it operation through appropriate laws.

It is necessary to make some distinctions here. The Preamble to the US Constitution does not grant the Federal Government a specific power to do anything. Its specific powers are enumerated in the body of the Constitution. Other powers (over education for example) belong to the nature of government in general, but are not included in that enumeration. They are reserved to the States or to the People (Article 10). This fact is relevant to the determination of the proper role of the Federal Government with respect to our healthcare system. It is also necessary to understand the distinction between the power to govern, to regulate, to manage, and to administer; as well as the difference between laws, rules, and regulations.

Few would deny that an adequate system of healthcare is part of the general welfare. Most would agree that it is legitimate for government to promote its development and to enact appropriate laws governing its operations. Some laws might be very controversial. For example, laws prohibiting discrimination against illegal aliens, deliberate killing, experimentation on humans, cloning, eugenic cleansing, abortion, embryonic stem-cell research, euthanasia, "mercy killing,"or doctor-assisted suicide. But few contest the right, or even the duty of government to pass laws of that nature--i.e., laws as distinguished from rules and regulations. It is a proper function of government to govern, but not necessarily to manage or administer the country's healthcare system.

It is conceivable that the common good may, in some circumstances, require the government itself to establish and manage a healthcare system, or to "nationalize" an essentially private one. Some believe that "socialized medicine" is the best way to go. But it is a question worth considering whether such a system is compatible with liberty, with the duty of government "to secure the blessings of liberty to ourselves and our posterity." There are several essential elements in the common good. It is the duty of government to attend to them all and not to sacrifice one to another. That requires prudence and moderation in the government and in the people.

Who Benefits? Who decides?

Women and children first” shouted the captain of the sinking ship. “First treat the slightly wounded” ordered the field commander in desperate and immediate need of more soldiers. (Some military doctors wanted to treat the severely wounded first, to prevent their dying.) As to the availability of health care in general, some demand affirmative action for minorities and a “preferential option for the poor” in the name of justice and human dignity. They are many and needy. A few insist that priority should be given to those who most benefit society. Others hold that equal treatment is the proper principle. They differ whether equality means equal eligibility for each person, or proportionally equal financial support “to each according to his need.” Still others take a more pragmatic approach that others reject as inadequate and insensitive. “First, don't bankrupt the country. Second, don't take over the healthcare system or usurp powers not constitutionally authorized. Respect the proper role of state and local governments, as well as private, intermediary associations. Third, require all to purchase private health insurance open to all, and remove restrictions on the insurance industry that inhibit competition and restrict its territory. (Government should be insurer of last resort for the deserving poor.) Fourth, focus health care on the condition and futures of the different age groups. Provide health education and preventive care for all; remedial and curative care for children and adults who can be restored to useful life; only palliative care for the rest--particularly for seniors running out of gas. No extraordinary procedures or inordinately expensive measures for any person who can't pay for them.“

It is impossible to avoid rationing and setting priorities so long as health care is a scarce good and the demand is virtually without limit. Such issues are in substantial part questions of distributive justice. But who is to decide? Some of them are decided in the market place by what insurers and sellers of health care can afford to offer, and buyers can afford to purchase. Some are decided by government, in the subsidies or funding it provides and in the general laws and regulations it establishes for health care. Some are decided by the doctor and patient together. Many American's prefer that rationing decisions be made as close to home as possible--between the patient and his doctor.

It is characteristically human to “want something for nothing,“ ”to have our cake and eat it too,“ to have ”third-party payers“ for the goods we want. There is never enough money to do everything we desire. Choices must be made and priorities set, not only within the world of health care but between other elements of the common good. Universal healthcare may be very desirable, but self-defense and victory in war more imperative. Government must decide among competing goods and competing “values.” The struggle for power and deliberation about what is best are the very stuff of politics. We want the People to decide, and that is why we favor democracy. “Power to the People!“"

"Justice is the advantage of the stronger“ asserted the ancient Sophist. The law declares what is just and unjust. The winner of the struggle for power is by definition the stronger and makes the laws according to the “values“ of her class or his winning coalition. It is no surprise that too often those “values“ both rationalize and favor the interests of the winners in the struggle for power. Contemporary Liberalism offers no defense against such a cynical view of justice and politics. At bottom, that is its own view.

"Don't tax me. Don't tax thee. Tax that rich man behind the tree!” If there aren't enough of those, keep borrowing or printing the necessary money until the bubble bursts and the economy collapses, hopefully sometime in the distant future. “Do not suffer today what can be put off till tomorrow.“ That appears to be the natural way of democracy.

Conclusion.

Much is at stake in this healthcare debate. The dominant opinion of justice and what it requires of government is one of the main causes of its form and policies. The view that justice requires government to guarantee or provide universal and affordable health care is a particular instance of the Marxist principle of justice. ("From each according to his ability, to each according to his needs.") The triumph of that view of justice could eventually bring in its wake the tyranny inherent in the Marxist principle, as our experience of Communism demonstrates.

Health care the capitalist way - 2

As Reagan said, “Individual freedom and ingenuity are at the core of everything we’ve accomplished.” All that has made America great has come from empowering the people, including and especially when it comes to the market. Capitalism has been the engine of prosperity for this country going back to its founding. As such, I am now proposing that Congress and the President consider the “Capitalist Manifesto for Healthcare Reform,” several specific, free-market fixes for the healthcare problem. In the first article of this series, I examined the importance of breaking down two critical barriers to competition: the third-party based system that sets consumers apart from paying and decision-making and state laws prohibiting insurance purchases across state lines. Cost and affordability, not quality of care, are the key issues with our healthcare system. So let’s look at another way in which we can directly empower the individual beyond increased choice and expand affordability—by adjusting policies surrounding the importation of cheaper prescription drugs.

High Costs: Prescription drug costs often contribute greatly to higher healthcare costs. According to the Kaiser Family Foundation, the number of prescriptions purchased in the U.S. between 1994 and 2004 was a whopping 68 percent, with prices averaging increases of 8.3 percent yearly during that period. “Although still only a modest part of total health care spending in the U.S (11 percent),” they note, “with so many people relying on prescriptions, the cost implications loom large for the American public, health insurers, and government payers.” The problems lie in Research and Development spending—specifically, patents and FDA regulations—and the fact that importing prescription drugs is illegal under current U.S. law.

Patents: Both patents and FDA regulations are significant contributors to $800 million in costs to launch a single new pharmaceutical product—costs which result in higher prices for consumers. First, patents are designed to give a company temporary monopoly on the product so that they can recover their R&D spending. A patent lasts 20 years, yet as the CATO Institute’s Roger Pilon points out, “the effective life for drug patents is about nine years.” Logically, the shorter the time, the higher companies must charge per unit during that time to make up for the costs. This process must be changed to permit the same amount of patent time that other products have.

FDA Regulations: Then there are regulations. Today, according to PHRMA, the process of discovery to FDA approval takes an average of 12 to 15 years. As such, many people who would accept the risks involved suffer during this time. As economist Milton Friedman suggested, “[T]he one big development you could make would be to go back [to the situation where you have] the FDA certify safety…but not efficacy, and let the market itself work in determining efficacy.”

Indeed, the FDA should test only for safety and allow doctors and consumers to judge efficacy, which would decrease costs substantially and thus allow for cheaper medications. By altering the regulatory process, more innovation and development will result in addition to lower prices.

Prescription Drug Importation: Finally, current law makes it illegal for prescription drugs to come to the U.S. from anyone other than the American producer. As of now, they must be approved by the Food and Drug Administration (FDA) for importation. Consequently, competition between prescription drug providers is stifled, as U.S. manufacturers lack the incentive to cut prices to beat out lower-priced contenders. But individuals, states and cities are already beginning to avoid these laws and import drugs from other countries. This should be made official: by permitting the importation of lower-cost prescription drugs from countries like Canada, consumers will have a larger list of affordable, cheaper medications to choose from.

Of course, we do have a right to know if what we’re buying hasn’t been FDA, so what’s to say that the government can’t mandate that imported prescription drugs say “NOT APPROVED BY FDA” in big, bold letters and be placed in sections stating “NOT APPROVED BY FDA” in the pharmacy? Leave it up to me and my doctor, not big brother Sam, to decide whether or not I want to buy a cheaper drug from Canada, approved by their version of the FDA, instead of the more expensive product from Georgia.

There are other concerns as well. The Heritage Foundation’s Nina Owcharenko, for instance, makes a good point: prescription drugs in other, Westernized countries are fixed in accordance with price controls, which would distort the international market and advantage foreign manufacturers.

However, we must recognize that the vast majority of R&D costs are being paid for by the Americans, with other countries essentially getting a free pass. The U.S. is the only nation where market dynamics of supply and demand play out in pharmaceuticals—and with good reason. Price controls in other countries, as Owcharenko points out, reduce R&D spending (not costs) for new drugs by as much as $5 to $8 billion each year and trials for new medical compounds by as much as 50-60 percent.

But as long as the ban on importation is in effect, American drug manufacturers are going to recoup their R&D costs here instead of pushing supply and demand principles on other countries—meaning higher prices for us. Essentially, prices are set differently in the U.S. from other countries, meaning the U.S. shoulders the cost burden.

By eliminating the importation ban, other countries will have no choice but to react to supply and demand principles, as American manufacturers will find it necessary to cut prices at home and raise them abroad. Thus, other countries will have to share in R&D costs, which is long overdue.

As Roger Pilon notes, pharmaceuticals can use contractual agreements (to do such things as restrict drug resale), limits on supply, and export pressures, among other things, to help ensure that foreign countries are not undercutting the company. In effect, American manufacturers will be encouraged to do whatever they can to discourage importation in order to maintain their market share, which can be done by lowering prices here and raising prices elsewhere.

Should the U.S. government repair the patent process, refocus FDA regulations and permit the importation of prescription drugs, Americans of all stripes will surely benefit from a noticeable reduction of healthcare expenses.

This is the second of four columns proposing specific, free-market alternatives for healthcare. The next will center on expanding access to Health Savings Accounts as the free-market way to insure the uninsured.

Jimmy Sengenberger hosts Regis’s weekly Seng Center radio talk show every Thursday night from 6pm to 8pm online at krcx.org. The author can be reached at Jimmy@SengCenter.com.

That was the week that was

Last week was truly remarkable. Republicans swept three state elections; then an Islamic extremist holding the position of an Army psychiatrist murdered 13 persons and wounded 31 others at Fort Hood, Texas; the House of Representatives defied the will of the American people by passing a comprehensive health insurance bill; and free people celebrated the 20^th anniversary of the demise of the Berlin Wall back in 1989. These events reveal the contrast that exists in this country and throughout the world between those who value freedom and those who do not. The most encouraging development is the growing awareness of our citizens that the future is won only by doing the right thing.

Reversing the results in last year’s elections, voters gave solid margins of victory to Chris Christie in New Jersey and Robert McDonnell in Virginia in their gubernatorial races, but also Republican candidates for the remaining statewide offices in those states and in Pennsylvania. President Obama campaigned in the first two states, despite the growing unpopularity of his administration.

Democrats have tried strenuously to spin the dismal results as merely local contests, irrelevant to the debate over their health insurance and environmental "cap and trade" proposals. But there is no doubt that it gave the Blue Dog Democrats in Congress incentive to resist party pressure to support these budget-busting and tax-increasing measures.

All good Americans are appalled and horrified at the shooting rampage of Major Nidal Malik Hasan, who shouted "Allahu Akbar" before he opened fire on his fellow soldiers and civilians prior to his scheduled deployment to Afghanistan. The news coverage has been remarkably vapid. The same articles which make it perfectly clear that Hasan is an Islamic extremist who could not bring himself to make war on his "fellow Muslims" and regards himself as a soldier in the radical Islamic cause, describe the shooter’s motives as unclear.

Sorry to say, the President himself has set the tone for this mindless and irresponsible attitude, asking people not to rush to judgment about a man and an incident that are as transparent as anything can be. We are learning, too, that "political correctness" or the blind indifference to if not covert sympathy with those who reject Western civilization, has infected the highest ranks of the U.S. Army.

No religion per se makes anyone ineligible for American citizenship or for participation in any civil government, but if the believer’s highest loyalty is to a doctrine that calls for the destruction of constitutional safeguards for human rights, there should be little doubt that he cannot be trusted with any responsibilities or respecting the rights of other citizens.

Notwithstanding weeks of polling date that reveal a solid majority of Americans opposed to government health care (AKA socialized medicine) and Republican election victories in three states that voted Democrat in 2008, the House of Representatives approved a bill of nearly 2,000 pages that would micro manage existing health insurance coverage and impose massive costs on the American people.

Despite considerable rhetorical blather about bipartisanship, the Democrat leadership managed to win over only one Republican representing a traditionally Democrat district in Louisiana and lost 39 Democrats representing traditionally Republican districts, passing the bill by a narrow margin.

It is evident that Democrats are desperate to pass some form of health care legislation, even if they lose seats or lose House control in 2010. Speaker of the House Nancy Pelosi was not deterred by the strong indications that her Senate counterparts lack the votes to pass the legislation, even if it followed her lead in dropping coverage for abortions. She is unmoved despite the fact that she is defying the consent of the governed.

Meanwhile, celebrations are in order on the anniversary of the removal of the infamous Berlin Wall, an event which President Obama either feels is beneath his notice or perhaps understands as an achievement for which he cannot claim credit. No greater contrast exists between Presidents who steadfastly supported the freedom of Berliners and of all Europeans during the Cold War years and the current President who feels more comfortable talking to Asian and Latin American despots than supporting leaders of free nations long allied with the West.

One cannot imagine a President Obama making the courageous decision of Harry Truman to supply Berlin during a long Russian blockade or the uplifting defiance of President Reagan in demanding that Mikhail Gorbachev "tear down this wall!"

The future of freedom is best entrusted to its dedicated friends.

Health care the capitalist way - 1

Obama is right up to a point. The status quo on health care is unacceptable. Too many people are without access to affordable coverage, and millions of people are uninsured through no fault of their own. We need change. But President Obama’s government answer is not the way to go. Capitalism has been the engine of prosperity for this country going back to its founding. As such, I am now proposing that Congress and the President consider the “Capitalist Manifesto for Healthcare Reform,” several specific, free-market fixes for the healthcare problem. The most critical aspect of reform, and the starting point, must be increased competition—something else President Obama claims to favor.

Putting You in Control: There’s a basic principle in economics that isn’t talked about all that much, but it stands true thanks to human nature: If someone else—a middleman—is putting up most of the cash for something people really want—or need—they’re going to get it more. You’re not worried about the cost—someone else is paying. This is exactly what happens with healthcare.

Government regulation and policies have essentially mandated a third party-based system that forces the consumer to work through health insurance companies, HMO's, employers and other middlemen that pay the supplier. 84% of all personal healthcare spending is made through private health insurance, the government or other private expenditures that are not directly from the patient.

Encouraging the third-party system are tax exemptions for employer-provided health insurance that the millions of self-employed and small business owners and workers who pay on their own do not receive. Own a big business? Congrats—you get a nice little tax exemption for healthcare! Run that mom-and-pop shop down the street, or your own home-based business? Tough. As Seinfeld’s Soup Nazi would put it, “No tax exclusion for you!”

These government incentives, policies and regulations put in place, in large part by the federal tax code, do nothing more than exacerbate the problem. Because of the third-party-payer system, health providers aren’t competing for individual consumers—they’re contending for large corporations like Target and Cisco. The problem here is that individuals are separated from the cost, driving up prices (premiums), and thus taking away decision-making authority of the patient.

Not a day goes by where we don't see commercials for Geico, AllState and other car insurance companies competing over who provides the best service at the lowest price—competition absent from healthcare because of the third-party system. To fix this, the government must equalize the healthcare tax exemption across the board so that everyone, not just middlemen and big business, will benefit from it. That means small businesses as well as individuals, all of whom will then be far more equipped to go out and find an affordable health insurance plan for themselves, their families, and their employees—plans that are right for them.

We should also examine the other policies and regulations that encourage the third-party system. As a result of both of these decisive actions, costs will go down. Making these adjustments to the current system would open up the market to increased competition by allowing consumers to shop around on their own, decreasing costs substantially while maintaining high quality.

Expand the Sphere of Competition: In his recent speech to Congress on healthcare, President Obama acknowledged the extensive concentration of business in the health insurance industry. As he pointed out, “75 percent of the insurance market is controlled by five or fewer companies. In Alabama, almost 90 percent is controlled by just one company.” While there are some issues with the calculation of these numbers, he is generally correct—the market is highly centralized and void of real competition. Another fundamental reason for this problem is again government-created: the inability to purchase health insurance plans across state lines.

Thanks to the 1945 McCarran-Ferguson Act, which granted states the ability to use licensing laws to prevent trade with insureres in other states, John in Colorado cannot purchase a plan from a company licensed in Arizona; instead, he must buy a plan from a firm in his state. Health insurance is largely regulated by the states, which require that any plan an individual insurance purchaser wishes to buy must comply with all of that state’s regulations. This advantages both insurers and regulators in maintaining psuedo-monolopolies in their respective states, in turn hurting consumers, who have few lower-cost options available to them.

Congress should do what it is granted by the Constitution and mandate that every state recognize insurance licenses of other states. According to the CATO Institute, “Letting individuals and employers purchase health insurance from out of state could reduce the number of uninsured Americans by as many as 17 million, or one-third of the most-cited estimate of the number of uninsured.” An individual state’s regulations, as CATO points out, need not be changed and can be enforced in the other states.

But what about states’ rights, you say? If ever there were an area where the feds can play a legitimate role, it’s this. The Commerce Clause in Article I, Section 8 of the Constitution explicitly grants Congress authority to regulate interstate commerce. What was one of the big reasons they did this? Because each state had its own tariffs between states under the Articles of Confederation—basically the same thing as these obstructionist regulations.

By asserting its rightful authority to break down barriers to insurance purchasing across state lines via repealing McCarran-Ferguson, Congress and the President will strike a considerable blow to insurance market concentration, truly boosting the “choice and competition” that Obama likes to talk up. If done alongside dismantling the third-party system, we will see costs begin to lower for everyone—all without a massive, trillion dollar government overhaul.

Jimmy Sengenberger is a sophomore and conservative student leader at Regis University. This is the first in a series of columns proposing specific, free-market alternatives for healthcare. The next will center on empowering the individual through Health Savings Accounts and prescription drug importation.