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Should Massachusetts Pay For Mississippi’s Healthcare?

As I have been predicting for a long time, state insurance regulators were unlikely to remain silent for long in the face of efforts to federalize major parts of state insurance regulation.  They’re talking now, and they’re  mad.

Last week, Connecticut Insurance Commissioner Thomas Sullivan testified in Congress on behalf of the National Association of Insurance Commissioners.  He said that federal regulation must not displace the current system of state regulation. Calling the proposed legislation a “regime change,” he said it would result in “redundant, overlapping responsibilities will result in policyholder confusion, market uncertainty, regulatory arbitrage and a host of other unintended consequences.”

Later, state Senator James Seward of New York, the President of the National Conference of Insurance Legislators described as “alarming” Congress’ efforts to create a federal insurance regulator.  According to Seward, the creation of a federal insurance regulator “would represent the first step down a path to federal insurance chartering—a concept that few interests outside some large banks and insurance companies endorse.”

But there’s more than just the regulatory turf battle.  In my home state of Massachusetts, there are concerns that provisions of proposed federal reform could seriously undermine the state’s landmark 2006 reforms.  It would also impose new costs on Massachusetts to fund the federal program – even though Massachusetts has succeeded in achieving nearly universal coverage.  As Senator Kerry and others said in a letter to Senate leaders:

But now, our constituents’ tax dollars will not only go to sustaining our own state programs, but will also go to states around the country that have consistently ignored the health care needs of their low-income residents, without any acknowledgement of our original investment. This is unacceptable.

The battle over federal health care reform is not just between left and right.  The battle lines run between the states and the federal government, over enormous budgets, and powerful constituencies.

To think anyone thought it was possible to deal with all of this before August 1.

*This blog post was originally published at See First Blog*

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