Friday, March 25, 2016

FULL FAITH

In Marco Rubio’s last debate, he got into an exchange with Donald Trump about Obama Care. Both men were critical of the Affordable Health Care Act, and both asserted that it should be summarily repealed and replaced.

But what exactly Mr. Trump would replace it with, became a point of difference. What he did say was that people should be able to purchase health care across State lines.

Being a businessman, Trump, I am sure, believes that competition among insurance carriers will bring down the premiums. That rather simple statement prompted the old judge to do some homework.

To begin with, I must confess that I am not one of the eight or nine people in the United States who have actually read the 2,700 words of the Affordable Care Act or the 11,588,500 words of administrative regulation that have been adopted to explain, enforce and expand Obamacare.

And I don’t intend to start now. Still, I think there is merit in going back to basics. So let’s start with the United States Constitution. Article IV, Section 1 says this:

Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of  every other State:

So let’s start by asking the simple question, Can an insurance company chartered under the laws of one state and subject to the jurisdiction of that state’s insurance commission, sell insurance to the residents of another state?

We know that some things a State does carry across state lines. Citizens of Michigan and Ohio used to go to Kentucky to get married because Kentucky law allowed girls to marry at age 16. Many years ago, Nevada developed a brisk business in divorce and marriage by its liberal legislation. In both of those instances, the marriages were recognized in the home states of the parties because of Article IV, Section 1.

My Michigan driver’s license will satisfy the Georgia State Trooper who pulls me over on I75.

Still, there have always been other areas in which a different rule applies. A person admitted to the Bar in Illinois cannot practice in the courts of Indiana. A physician licensed in Utah cannot open an office in Colorado. A company licensed to construct homes in Florida can’t build houses in Georgia without getting a Georgia builder’s license.

On the other hand, a corporation formed in one state must be recognized in every other state. Delaware, for example, has long been a preferred state of incorporation. The Diamond State makes it quick and easy to form a corporation, and many companies incorporated there actually do no business in Delaware, and maintain their offices elsewhere.

Electronic communication tends to obscure state lines. My Michigan Blue Cross Blue Shield insurance pays for medical services in Minnesota and Florida. I doubt, however, that Michigan Blue Cross could underwrite a group policy to cover the employees of a Florida corporation.

On the other hand, I have no doubt that the employees at the Florida campus of Cooley Law School are covered by Michigan Blue Cross, because they work for a Michigan corporation.

Something like 44 states have passed the Interstate Insurance Product Regulation Compact Act which makes them part of a voluntary interstate commission that adopts standards for the regulation of insurance companies by their respective state governments.

This cooperative effort suggests that there are ways for the states to work together and yet retain their Tenth Amendment sovereignty over domestic affairs. Just because the national government has the authority to regulate interstate commerce doesn’t mean that Uncle Sam has to make all the rules.

In 2012, we heard a lot about “Romney Care.” It was the system of State mandated health care adopted in Massachusetts when Mitt Romney was its Governor.

I have never heard any hew and cry for the repeal of that law. It may or may not be a good system. What is important is the fact that the people of Massachusetts adopted it and they can change it. 

Not every facet of our lives has to be controlled by Washington D.C.

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