December 2 2010

Even the Marketplace of Ideas Can Be Regulated

Hadley Heath

Tuesday I attended an event called "Challenges and Changes: The Next Chapter in the Health Reform Debate."  The whole event, sponsored by the Galen Institute, the American Action Forum and the Institute for Policy Innovation, was fantastic.  I got to listen to a lot of leaders in health policy from Washington and beyond.  A few of the speakers were legislators from both the state and national level.

One such speaker was Sen. Ron Wyden (D-Ore.).  Wyden has "defected on ObamaCare" and recently cosponsored a bill called the "Empowering States to Innovate Act" with Sen. Scott Brown (R-Mass.).  I've written about this health care bill once before; I nicknamed it "BrownCare."

The legislation would allow states to apply for waivers from certain provisions of ObamaCare sooner (2014) than scheduled (2017).  "Waiver" is a popular word associated with the health care reform. 

But the main goal of the bill is to encourage states to innovate.  Tuesday Wyden explained to the event attendees that some states may want to approach health care as a free market, others might want to use a government-run exchange with private insurers, and still other states might want to implement a single-payer program.  He wants to return health care to states' control.

He also gave us a talk about the "Marketplace of Ideas."  Truly, one of the great features of a federalist system is that when states experiment with different types of policies, we see what works and what doesn't work (eh-em, Massachusetts), so that we can learn from each other across the country.

Listen, I am a believer in the marketplace of ideas.  One of the best things about markets is that, when they are competitive, they weed out the bad products (ideas) and the best products (ideas) rise to the top.  But my problem with Sen. Wyden's remarks Tuesday is this: Even the marketplace of ideas can be regulated.

My fear about his bill is that it still requires states to meet the mandates put forth in ObamaCare.  It doesn't provide for real experimentation.  It would be a competition between free-market-favoring states and public-option states, but the former group would have their hands tied.  The results of such a competition, I'm afraid, would mislead everyone.

In fact, this was the problem with the nationwide angst about health care before the passage of ObamaCare.  Frustration about high prices and inaccessible care was warranted, but those who said, "This is what the market does to us!" were wrong.  The market for health insurance wasn't functioning properly.  It was already highly regulated. 

As my colleague Romina explained about competitive markets, there are some basic ground rules.  If we want to see how true free-market reform in health care would work, I'm afraid we first have to work backwards and take away many government mandates before passing more legislation.  I appreciate the efforts of Sen. Wyden and Sen. Brown to head toward bipartisan reform, but as a free-market supporter, I don't want to be forced to sell my ideas in a marketplace that puts me at a disadvantage.

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