To the Editor,
Republicans want to scrap Obamacare and, instead, allow the sale of health insurance policies across state lines, claiming that increased competition will lead to lower premiums. Will it? Let’s review a parallel history of credit card interest rates.
Back in the 1970s, if you wanted a credit card, you went to your local bank. States set maximum interest rates of around 12%.
In the 1980s, Congress and the Reagan Administration allowed credit cards to be issued across state lines, claiming that the increased competition would bring down interest rates.
Today we are offered credit cards from many sources — banks, retailers, airlines, hotels, and more. Did all of this competition cause interest rates to drop? Nope.
Delaware and South Dakota relaxed their regulations to the point that all credit card issuers now operate from those two states. Today’s interest rates hover around 25-30%, and our states have no say.
So, how does this relate to health insurance premiums?
Today, each state can regulate health insurance premiums for policies sold in that state. Once policies can be sold across state lines, health insurers will move to the states with the most lax insurance regulations (like Delaware and North Dakota for credit cards).. Without Obamacare, insurers can resume double-digit premium increases, and, if we can’t afford that, too bad.
Let’s be careful what we vote for. Credit card debt can be avoided — illness and injury, not so easily.
Post-Script: When you want to put something over on people, first get rid of the old folks, because they are apt to remember when you pulled the same trick forty years ago.