Obviously, the issue of interstate sales of insurance is at play in the current race to replace John Oxendine as Georgia’s Commissioner of Insurance and Fire Safety. Gerry Purcell is for interstate sales, while per this tweet from him, pretty much everyone else in his race is against it. Monday evening, I broke the press release of Stephen Northington, one of Purcell’s competitors for the Republican nomination for Insurance Commissioner, giving his reasons for being against the bill currently in the Georgia Senate that would allow interstate sales.
Any long time reader of this site knows that insurance is my weakest policy area. Much like calculus, I simply do not understand it at all.
But I do understand the Constitution, and that is the basis of my own position on this issue.
One of the most often abused clauses in the entire Constitution of the United States of America is known as the “Interstate Commerce Clause”. Listed in Article I, Section 8 of the Constitution as one of the enumerated powers of the Congress, the Instate Commerce Clause states
The Congress shall have Power… To regulate Commerce … among the several States
To my knowledge, no limit is placed on that power anywhere in the Constitution. Meaning that if it involves interstate commerce, it falls within the explicit enumerated powers of Congress to regulate. This means that if interstate sales of health insurance are allowed, Congress automatically gets to regulate it, and there would be no Constitutional basis for stopping them from doing so.
In other words, interstate sales of health insurance, something Gerry Purcell is alone in the Insurance Commissioner race in supporting, would be a perfectly Constitutionally valid method for regulating healthcare ala Obamacare.
Gerry’s argument, as expressed in our twitter conversation, is that interstate sales of life, auto, and other insurances are already allowed, so why shouldn’t we do it with health insurance as well. He also claims that not allowing interstate sales is discriminatory against small businesses.
My points against those arguments are these: 1) Why should we give the National government even more power than it already has? As a localist, I prefer government to be as close to me as possible. My existing levels of government include a 7 member City Council, a 5 member County Commission, a 236 member Georgia General Assembly, and a 535 member US Congress. Guess which of those levels are easier for me to track and interact with/influence as an individual? Why should I take the power to regulate this area away from the 236 member Georgia General Assembly, whose members are “part time” citizen legislators who are active in their communities and give it to a 535 member US Congress, whose members are full time politicians who live most of the year in Washington DC? 2) I fail to see any discrimination against small businesses here. A state’s insurance regulations are part of the cost of doing business in that state, and if that cost is too much for your business, you are perfectly free to take your business to a state with a lower cost of doing business.
Gerry Purcell wants to claim that interstate sales gives more individual liberty. I don’t think it does. I think it simply allows more of the liberties we currently have to be stripped from us by an untrustworthy power-hungry US Congress.
You are dead on correct, Jeff. It doesn’t. Those who support it usually wind up with the “well,.. well… then you support Obama! You support the status quo (an Obama argument if I ever heard one) … so… so… THERE” argument. Mr. Purcell actually told a room full of insurance people – almost all of whom recognize the big government pitfalls of interstate insurance sales because they actually deal with insurance – that “they agree with Obama”. I’m not sure how effective virtually calling your audience idiots en masse usually is, but I can tell you it went over like a lead balloon today.
Repeating over and over again that it will increase competition doesn’t make it so. It really should give one pause to realize that the current 16-year Insurance Commissioner and ALL SEVEN of your opponents agree on the pitfalls. But it’s his policy and by God, he’s sticking to it.
Tide,
In the interest of disclosure, can you at least acknowledge who you work for? I’m not going to ask you to reveal your name, but you and I both know you work for a candidate and we generally at least try to have open disclosure about those things around here. I hope you understand.
Oh, no problem. I’m proud to disclose that I work for Stephen Northington.
I am puzzled with Gerry’s argument that life, auto and other insurance sales across state lines are already allowed across state lines so we should do the same for health insurance. To my knowledge, having worked on both the property/casualty and life/health sides here in GA since 1995, one can buy these different policies from carriers based in other states, but they have to be admitted by the GA DOI and their agents licensed here in GA (either as residents or non-residents). The rates they are allowed to charge are regulated by the DOI. I would be interested to see what his line of reasoning is regarding his assertion that only health insurance is not sold across state lines…
That’s a very good point. Across state lines sales is allowed but the state is still in position to regulate.