Return Insurance Regulation to the States

April 14th, 2017 by Leave a Comment

By Ralph T. Hudgens

RalphHudgensMuch of the impasse in Washington regarding health care reform relates to health insurance regulation and mandates. There is a very simple solution: Return the power to regulate insurance back to the states, where it rightly belongs.

Certainly, Congress should be able to find common ground in the desire to lower costs, improve quality and empower states. Much of the talk in recent months has been about how difficult it will be to replace the Affordable Care Act (ACA). The focus of the conversation should instead be on the consequences to the American people if Congress does not repeal this failed overhaul of the health insurance industry.

When the ACA was first implemented, as the Commissioner of Insurance for Georgia I warned of 198 percent rate increases for some Georgians. Unfortunately, rates have climbed even higher every year, especially for the middle class. Congress faces difficult choices, but refusing to act clearly – and literally – is an option that the people of Georgia simply cannot afford.

There is no one-size-fits-all health care solution that can be adequately tailored to address the diverse health care needs of all Americans. Instead, in keeping specifically with the plain language expressed in the 10th Amendment of the U.S. Constitution, the principles of federalism, and America’s longstanding tradition that the power to regulate insurance belongs primarily with the states, Congress should give us the ability to craft market-based solutions that work for our residents.

I welcome any action by the federal government that truly shifts authority away from Washington, D.C., and returns it to Georgia and allows our state to set policy in areas so important to the lives of our citizens.

The ACA mandated that insurance companies offer coverage to individuals with pre-existing conditions. That is a laudable goal, but the law did not adequately address the significant price increases that resulted from the coverage of pre-existing conditions.

In Washington, advocates of the ACA promoted the individual mandate as the antidote to the higher prices that would result from the guaranteed issue provision. The theory was that forcing healthy people to buy into the risk pool would offset the cost of providing coverage to people with pre-existing conditions.

The individual mandate has not worked. It was poorly enforced and ignored the reality that many middle-class Georgians cannot afford the insurance policies offered under the ACA.

The federal government should adequately fund state-based high-risk health insurance pools. Separating higher-cost individuals into a state-based, federally funded high-risk pool should allow the remaining risk pool to function normally, without the significant cost pressure created by the guaranteed issue provisions.

Comprehensive medical insurance existed in Georgia before the ACA’s federal mandates and will exist after the law is repealed. States are capable of determining the definition of insurance and should have the ability to do so.

Having served in the Georgia Legislature, I know first hand how hard it is to find consensus on complex legislation. But the stakes are too high to give up. Health care costs are bankrupting our governments, our businesses and our families.

As we celebrate the Christian holiday of hope and rebirth, let’s reawaken the constitutional idea of federalism. States are the laboratories of democracy and deserve  the freedom and ability to innovate without the heavy hand of an interfering federal government. It is in the states that we will develop and nurture the solutions that rein in costs and protect our most vulnerable citizens.


Ralph Hudgens, Georgia’s Insurance Commissioner, wrote this commentary for the Georgia Public Policy Foundation. The Foundation is an independent, nonpartisan, nonprofit think tank that proposes market-oriented approaches to public policy to improve the lives of Georgians. Nothing written here is to be construed as necessarily reflecting the view of the Georgia Public Policy Foundation or as an attempt to aid or hinder the passage of any bill before the U.S. Congress or the Georgia Legislature.

© Georgia Public Policy Foundation (April 14, 2017). Permission to reprint in whole or in part is hereby granted, provided the author and his affiliations are cited.

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