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Tuesday, March 9, 2010

Federalism and Health Insurance

The health care debate involves tough questions about federalism. The New York Times reports:
At the heart of President Obama’s drive to rein in health costs is a proposal for federal review and regulation of health insurance premiums, with a new agency empowered to block excessive rate increases.

State officials are leery of the proposal, which raises a host of questions: How would Congress define “excessive”? How would the new federal power relate to state insurance regulation?

The proposal has great political appeal. But experts see a serious potential problem: Federal officials will focus on holding down premiums while state officials focus on the solvency of insurers, the ultimate consumer protection.