Trump's great idea: a common market in health insurance
Trump then pivoted from this to a constructive suggestion about reforming health insurance in America, proposing a change that, while big enough to make a difference, is sufficiently non-revolutionary to be plausible.
"What I'd like to see," he said, "is a private system without the artificial lines around every state."
Right now, you see, health insurance is a heavily regulated industry. And it's regulated in slightly different ways by each state government. Consequently, while buyers and sellers of most products (breakfast cereal, cars, appliances, clothing) have one gigantic marketplace to participate in, buyers and sellers of health insurance have a handful of midsize markets (California, Texas, New York) and a few dozen small ones.
"I have a big company with thousands and thousands of employees," Trump observed, but "if I'm negotiating in New York or in New Jersey or in California, I have, like, one bidder. Nobody can bid."
One bidder is an exaggeration, but it's true that the number of players in any given state market tends to be small, and the problem is getting worse. The issue is especially severe in smaller states, where the overall size of the market isn't necessarily big enough to make it worth anyone's while to enter. But it's also a logistical hassle for employers who operate in multiple states, especially because states aren't real economic units. Lots of people live in New Jersey and work in Pennsylvania, or commute from Kansas to Missouri.
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