Inter-State Competition & Mobility

Matthew Yglesisas wrote about leaving health care to the states instead of having a federal answer to the health care situation.

Medicaid allows for significant state-to-state variation in generosity and coverage levels. In liberal states, it tends to be very generous. But in conservative states, it tends to be very stingy. Any state-level insurance efforts will recapitulate that pattern. If you want to help poor people in Texas and South Carolina and Arizona get insurance, you have to do it on the federal level.

That may be true about Medicaid but that is limiting the scope of things. In a system whereby states regulate health care services and the pre-paid system of health care insurance, states can compete against each other while maintaining a sense of freedom of choice. In a comment, I wrote:

The one good thing about living in the United States is mobility and opportunity to go to another state, with different statutes and laws that comply with your preference. If states do their own thing and have a preferable health care and insurance system , people will flock to that state. In a way, states can begin competing against each other for the best and brightest, attracting them with that unique and preferable health care system.

States that are more generous will attract those who may not be as well off as others; in those states, education is more plentiful and accessible, creating upward mobility as well.

While competing health care systems between states may not necessarily address health care costs directly, it would balance freedom for states to do their own thing and, perhaps, improve them on a more effective level based on the nature of the state’s economy and needs instead of having a blanket answer for all states that may hinder the vitality of the state’s economy–kind of like what happened in Spain (i.e., one size doesn’t fit all).

This would be the case if we don’t narrow the scope to one or two medical programs that have built-in requirements and limitations on how states can dole out the funds.

Of course, I don’t necessarily advocate this competitive system per se, but it’s a thought.

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