Friday, June 04, 2010

My Interview with Gerry Purcell (Part IV)

In this segment, I wanted to explore two issues I found about Mr. Purcell that caused me some concern. Mr. Purcell has campaigned on lowering health and auto insurance costs for Georgians. I get a little nervous when conservatives start promising to lower insurance costs. Also, Mr. Purcell has campaigned on making Europe pay "their fair share" in research and development costs on new drugs. Again, whenever a politician wants someone else to pay "their fair share" I start to worry. I would soon find some very interesting answer.

I asked Mr. Purcell, specifically, how he would lower insurance costs for Georgians. He has campaigned very heavy on this issue, and it's one of the first things you notice if you go to his Facebook page. I thought his answer was very interesting. Discussing health care, Mr. Purcell pointed out that while we are fighting to repeal Obamacare, we should simultaneously look for ways to improve health care. He called this method "Fight and Fix". Gerry Purcell is a proponent of allowing insurance companies the ability to sell across interstate borders. However, he believes the insurance commissioner should have the right to audit any company selling insurance in their state, even if that company is located out of state. "We set up a compact of four or five southern states, we tell the Federal government to stay out of it, we got it," he stated. He pointed out that we currently do this with long term care and other types of insurance. He also pointed out that Alabama, one of our neighbors, has cheaper insurance. Why? They have lower taxes on health care, and fewer mandates. Mr. Purcell gave an example of a tax in Georgia that drives up our health care costs. It's the health care tax, it runs 4.75%, and 99% of Georgians don't know it's there. Mr. Purcell stated that if he is elected, he will work to have all embedded taxes clearly shown to the consumer.

Another way to lower our insurance costs would be to allow businesses and smaller groups to pool together. Mr. Purcell pointed out that, "if you're a small business with 25 employees and you compare your rates to a business with 2500 employees you start out with a 20% punishment. You could be the healthiest group of 25 people in America; your rates are still going to be 20% higher right off the bat than the 2500 group." Gerry Purcell also told me that more transparency might help drive costs down. Most people have no idea what a doctor's or hospital visit really costs. Health savings accounts are great way for people to save for their insurance costs, and for them to see exactly what a doctor's visit costs.

In researching Gerry Purcell, I discovered that he has called for, when speaking of healthcare research and development, a "… bold trade policy to address the inequities, especially with the European Commission, Canada, and other nations who can afford to pay their fair share of research and development costs."

I asked him how would this work and how could he possibly force foreign governments to pay their fair share? Mr. Purcell quickly admitted that he couldn't do it by himself, that to fix this really required Congressional action. However, he pointed out something I had never considered: Insurance Commissioners actually have an interesting amount of power on a national level. He pointed out that Insurance Commissioners are considered experts in their field, and that many legislators really don't understand insurance. As such, an insurance commissioner can have a real impact on a national insurance discussion.

He then pointed out that over the last year there has been a lot of misinformation in the healthcare debate. One of the error's is when people compare healthcare costs in Europe to those in the United States. One of the reasons this is an apples vs. oranges comparison is that the U.S. heavily subsidizes Europe's health care. Mr. Purcell went on:

"I will give you an example: the last eight or nine blockbuster drugs came out of the United States and so the problem is that we pay. We use about 35% of the world's pharmaceuticals, which is high, but we pay for 60% plus of them. There are 29 industrial nations in the world, and it's time they pay their fair share. It's time that the President of the United States looks at Europe and says, "We're not subsidizing your healthcare costs anymore."

But what would this look like? How would we enforce such a thing? While it wouldn't be easy, or painless, we could do it very effectively with the correct trade policies. Mr. Purcell argues that we need to talk to our trade partners and explain it's time for a fair and free trade agreement. We won't continue to pay for their healthcare anymore.

In the next installment, I ask Mr. Purcell to look into the future and predict the challenges that our next Insurance Commissioner might face.

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