In his weekly address, the President points to outrageous premium hikes from health insurance companies already making massive profits as further proof of the need for reform. Looking ahead to the coming bipartisan meeting on reform, the President urges members of Congress to come to the table in good faith to address the issue. Hope springs eternal.

I generally think of Ezra Klein as the Rod Carew of political reporting. Yeah, he's an All Star with a stellar batting average but he hits more singles than home runs (only 92 of Carew's 3,053 hits were round trippers). Well today Ezra Klein hit an out of the park home run demonstrating why the GOP's idea of selling health insurance across state lines is "a terrible, no good, very bad health-care idea."

He writes:

Insurance is currently regulated by states. California, for instance, says all insurers have to cover treatments for lead poisoning, while other states let insurers decide whether to cover lead poisoning, and leaves lead poisoning coverage -- or its absence -- as a surprise for customers who find that they have lead poisoning. Here's a list (pdf) of which states mandate which treatments.

The result of this is that an Alabama plan can't be sold in, say, Oregon, because the Alabama plan doesn't conform to Oregon's regulations. A lot of liberals want that to change: It makes more sense, they say, for insurance to be regulated by the federal government. That way the product is standard across all the states.

Conservatives want the opposite: They want insurers to be able to cluster in one state, follow that state's regulations and sell the product to everyone in the country. In practice, that means we will have a single national insurance standard. But that standard will be decided by South Dakota. Or, if South Dakota doesn't give the insurers the freedom they want, it'll be decided by Wyoming. Or whoever.

This is exactly what happened in the credit card industry, which is regulated in accordance with conservative wishes. In 1980, Bill Janklow, the governor of South Dakota, made a deal with Citibank: If Citibank would move its credit card business to South Dakota, the governor would literally let Citibank write South Dakota's credit card regulations. You can read Janklow's recollections of the pact here.

Citibank wrote an absurdly pro-credit card law, the legislature passed it, and soon all the credit card companies were heading to South Dakota. And that's exactly what would happen with health-care insurance. The industry would put its money into buying the legislature of a small, conservative, economically depressed state. The deal would be simple: Let us write the regulations and we'll bring thousands of jobs and lots of tax dollars to you. Someone will take it. The result will be an uncommonly tiny legislature in an uncommonly small state that answers to an uncommonly conservative electorate that will decide what insurance will look like for the rest of the nation.

In other words, it's a regulatory race to bottom.  

Here's a high-profile surprise - and it's as much a surprise to the Washington Post's Ezra Klein as it is to us. This illustrates part of what's wrong with an employer-based health insurance industry that offers little to no choice to its consumers. From Klein's blog:

I didn't know I was uninsured. Didn't have any reason to believe I was uninsured. But, for the past four months, I've been among the uninsured.

The story actually starts a decade ago, when I was a part-time tutor for Score Educational Centers, which were later consumed by Kaplan Inc., which is in turn owned by The Washington Post. Fast forward 10 years, and I'm on the phone with our benefits people setting up my health insurance. Everything seemed to work fine -- except that I didn't receive any cards or membership information. When I inquired after it, I was informed that I didn't exist in their records at all.

What seems to have happened is that my Social Security number was in the computer system from my time with Score. Since my classification was "part-time employee ineligible for benefits," the computer overrode the effort to choose my health insurer.

There's more...

Ezra Klein, now of the Washington Post, has an interesting and illuminating interview with Senator Kent Conrad, the North Dakota Democrat who chairs the Senate Budget Committee that sheds light on the "compromise" that seems to be emerging in the Senate as the alternative to a public government-run health care option.

To begin with, Senator Conrad provides some background on how the co-op option came about. According Senator Conrad, the G-11 group of Senator that includes both Republicans and Democrats, chairmen and ranking members of the key committees, who are responsible for coordinating health care reform in the Senate approached him and asked to come up with something to bridge the divide between those who are strong adherents to the public plan and those who are strongly opposed. The Senator added:

The co-op structure came to mind because it seems to fulfill at least some of the desires of both sides. In terms of those who want a public option because they hope to have a competitive delivery model able to take on the private insurance companies, a co-op model has attraction.

And for those against a public option because they fear government control, the co-op structure has some appeal because its not government control. It's membership control, and membership ownership.

Also the co-op model has proven very effective across many different models.

It's an interesting idea and worth exploring though it shouldn't mean precluding a public option. Ezra Klein also seems to feel this way and asks Senator Conrad why not do it alongside and let a thousand coverage models bloom?

Well it seems the arcane rules of the Senate and the math are the problem. Senator Conrad believes health care reform requires a 60 vote threshold and that the votes simply aren't there.

There's more...

I was surprised to see Ezra Klein endorse Nicholas Kristof's column arguing that "the central challenge in the poorest countries is not that sweatshops exploit too many people, but that they don't exploit enough." Back in my college Macroeconomics class, this argument was expressed as "They're not poor because they work in sweatshops.  They work in sweatshops because they're poor."

Well actually, they're poor because they don't make enough money to support themselves.  If the people who hire them paid them enough, they would not be poor.  Providing jobs to people who would rather work them than stay unemployed doesn't release whoever provides the job from responsibility for how they treat them, just as saving someone from drowning would not give me any more right to mug that person than I have to mug anyone else.

The Postreported in 2005 that National Labor Committee Head Charles Kernaghan

gets angry when he recalls what a worker told him in Bangladesh: "If we could earn 37 cents an hour, we could live with a little dignity." (As opposed to the 21-cent hourly wage that barely staved off starvation.)

As CAPAF's Sabina Dawan observes, it's not as though the International Labor Organization and allied groups working to close such gaps and to see basic human rights protected in plants that make Western companies so rich are out to drive the people of Cambodia out of their jobs - or as though that's the inevitable result of letting workers go to the bathroom, or leave work to give birth.  Does Kristof believe that the Bangladeshi worker Kernaghan references makes 21 cents an hour because at 22 cents his plant would stop making a profit?

As Richard Rothstein wrote in his rejoinder to Kristof:

There's more...