Just a quick post this Friday morning after a short walk to work.
In yesterday's Washington Post, Rachel Weiner and Lydia DePillis wrote about how Senator Mark Warner is thinking of ways that marketplaces for employee benefits could be set up a la the Affordable Care Act (ACA). This got me thinking about that one sentence.
ACA healthcare insurance "marketplaces" aren't really marketplaces: they are government controlled state-based offerings of regulated, predefined packages. In an open marketplace, consumers are free to choose from an infinite number of combintions where offerors are not constrained by state lines.
I think conservatives and progressives get the whole "marketplace" thing wrong: the "invisible hand" needs an advocate for free markets in the form of a strong but limited national government. Too many conservatives want a marketplace with no government oversight – a free-for-all where any seller can do anything, controlling the terms of the sale and spewing externalities as they please. Too many progressive see a marketplace where consumers are pawns, subject to overpowering producers and the weaknesses of their own flesh.
Senator Warner is right to seek market-based solutions but my concern is that he seems to advocate a government "set up". Instead he should be questioning mechanisms and arrangements already in place where producers and government constrain the workings of a free market. In the case of healthcare insurance: why are consumers restricted to shopping within their state and are state insurance commissions serving consumers, insurers, or themselves?
While progressives often press for federal government action, conservatives plump for devolution of power to state governments. Is there really any difference? ACA's state-based markets seem to be a sop to conservatives' concern on overreach by the federal government. But by doing so consumer choice is limited and the power of a unconstrained free market is handcuffed.
