Not in the borrowing sense, but in the way credit cards are issued.  If you look at all those credit card applications that you (used to) receive, you’ll notice they come from only two states: South Dakota and Delaware. That is because the federal guidelines allow banks to issue credit cards to customers in other states. So, states starting racing down to the bottom. The “winners” were DE and SD, and they won by eliminating their usury laws and allowing outrageous rates of interest that simply aren’t allowed in states like California.

And now Utah and Mississippi are hoping that will be the same for health care, as the “big idea” that Republicans bring to the table is the idea of selling plans across state lines.  Carly Fiorina touted this idea at her launch as one of her central campaign themes. How will that work for health care? Well, California has requirements that protect the consumer and patient that other states don’t really have.  Mental health parity, where insurers are required to treat mental illness in the same manner as a physical illness, is one example. Jackie Speier fought this fight in California for 14 years, and today she is fighting it in Congress.

Healthcare overhaul bills in both the Senate and the House would open the door to insurers selling policies across state lines — which some lawmakers fear could allow health plans to take advantage of the lenient rules in some jurisdictions while avoiding tougher enforcement regimes in places like California.

“It would be a huge problem for California consumers,” said Rep. Jackie Speier (D-Hillsborough), who helped craft insurance laws when she served in the state Senate. “California is leading the way in terms of consumer protection, and I don’t want to see that lost.” (LAT 11/16/09)

Yet at least some part of this idea is already in the bill that the House passed, and looks like it will appear in the Senate bill.  It isn’t as pure as the Republicans would like, as it includes a federal floor. Because, you know, the Republicans would like to be able to buy/sell insurance that covers only severed limbs, but won’t help you when you get cancer.

The funny thing about this “big idea” is that even the insurance companies think it is a terrible idea. It will encourage states to be more permissive to insurance companies and allow them ever greater liberties in what they cover. And health insurance companies, operating in competitive markets, will offer some form of the basement floor insurance plan.

Whereas some insurers want to be able to sell policies across state lines, the Blue Cross Blue Shield Assn. opposes the idea. It argues that such permission would result in inexpensive, watered-down policies. Establishing a minimum level of benefits at the federal level could mitigate that somewhat, said Kris Haltmeyer, Blue Cross Blue Shield policy director.

Still, he said, “I do worry that there will be a race to the bottom, but the bottom won’t be as low as it used to be.”(LAT 11/16/09)

As we just finished writing the credit card “bill of rights” we are now moving to use that same failed model for our health insurance? Apparently some of our national leaders need more convincing evidence than what is directly in front of their faces.

As an endnote to this story, I’ll simply describe the exciting packet I received from Kaiser yesterday. Despite not changing in their demographic or risk assessment model, nor changing anything in my individual plan, my monthly health insurance fees went up about 20% year over year. This just isn’t sustainable.