Monthly Archives: March 2016

Interstate Health Insurance?

If the Republicans win the general election in the fall and Obamacare is repealed, what happens? Several common threads run through the various strategies from Republican front runners.

The most odious feature of the the Patient Protection and Affordable Care Act (PPACA) among conservatives seems to be the mandate, so it will go. If you don’t want to buy insurance, you don’t have to. If for example you get pneumonia from an untreated infection, you can go to the hospital and get free care. For the hospital to remain in business however, they have to cover the cost of the “free” care with higher costs to the paying customers – the insurance companies. And remember that emergency care is the most expensive way to deliver care, bar none. The cost to those who buy insurance will go up to subsidize the uninsured. This doesn’t do anything to lower costs, it’s what we had before and it is a silly way to keep everybody healthy.

So everyone, republicans included, realizes that steps need to be taken to bring down the cost of healthcare and one thing you hear constantly is that allowing the purchase of insurance across states lines will increase competition and thereby lower costs. Will it work? It works with widgets. If someone in another state sells widgets at a lower price than that can be bought here, then go there to buy where the price is lower.

The story with health insurance is quite a bit more complex. The PPACA includes provisions that already allow the purchase of health insurance across state lines. The difference between the PPACA compact provisions and earlier interstate sales provisions are that the PPACA requires all states to comply with a minimum level of insurance coverage. But interstate sales is not happening, so why?

Insurance companies make money by negotiating prices for “healthcare commodities” – doctors fees, hospital costs, laboratory costs, drug costs etc. All these costs are negotiated to control costs to the policy holders. The nature of the policies sold in a state are regulated in the state.

Georgia, Maine, and Wyoming are states that have taken the step to promote interstate sales. The problem is not that regulations prevent it, but rather no insurers are interested. In none of the aforementioned states, has an out of state insurer expressed interest in selling in those states. This is partly due to the fact that out of state insurers will still have to abide by the rules in the states where they sell.

Eventually it may happen. There is a case to be made that costs are lower the bigger the pool of insured, and crossing state lines could expand the pool for a given insurer. In some markets such as large metropolitan areas that cross state lines, this could happen sooner rather than later, but the development will take time. How how much will this lower the cost to a consumer?

Experts cite the fact that insurance costs depends on how healthy a given group of policy holders are. Arkansans currently have the highest obesity rate in the country, Colorado the lowest. If an insurer from Colorado wanted to sell in Arkansas, the policy costs would be base on the obese Arkansas pool, not the fit Colorado pool. Consequently what cost savings may occur would be small.

In a final irony, a catch-22 of sorts, interstate sales of insurance means federal regulation, anathema to generally states rights conservatives.

Wind Power Transmission Line

A federal decision on the Plains and Eastern Clean Line High Voltage Direct Current line is imminent. This proposed 700 plus mile long transmission line will extend from the panhandle of Oklahoma, through Pope County, and on to Memphis. If approved and built it will allow for the movement of large amounts of wind generated power from the midwest to parts east where it can be used to replace coal fired generating plants.

The route already approved by the National Environmental Policy Act (NEPA) will pass through central Pope county. A substation just north of Atkins will allow Arkansans a piece of the power from the line. For perspective the line will cross Big Piney Creek near where it crosses Highway 164.

The line and others like it are necessary to reduce our need for coal which fouls the atmosphere in multiple ways. There is a superabundance of clean, relatively inexpensive energy waiting to be tapped in the midwest, the only need being transmission.

The Line is not without its detractors however, especially those in the path of the powerline right-of-way (ROW.) It will require a couple of hundred foot wide ROW with 150 foot towers spaced about 5 to the mile. The land within the ROW can be used safely for any purpose with the exception of forestry – crops, hay fields, and pastures are acceptable uses for the area. Landowners will be compensated for the ROW but they complain that compensation is insufficient.

It really boils down to “Not In My Backyard” (NIMBY.) This is not surprising, nobody wants their view of a skyline marred by powerlines. But powerlines are a fact of modern life. Anyone who is connected to the electrical grid benefits from numerous folks having yielded a ROW to get that power to their home or business.

One suggestion to remove the negative visual impact would be to bury the line underground. It has been done locally on a very small scale. In some newer subdivisions the distribution lines are buried but not for far, as it is quite expensive compared to overhead lines.

The relative cost of burying high voltage transmission lines is assumed to be prohibitive as it is just not done with the exception of lines that cross large bodies of water where it is the only possible alternative.

To bury a transmission line requires serious disruption, trenching then back filling, not just pastures and hay fields but sidewalks, roadways, and even rivers and wet lands. For forest land, a clear cut ROW would be necessary to be able to bring in the heavy equipment necessary to excavate and lay the line.

One of the benefits of buried lines is that they are less susceptible to weather related outages. The other side of the coin is when an outage occurs in an underground line it is harder to locate and harder to access, changing repair times from hours for overhead lines to weeks for underground lines.

Cost estimates are in the range of 2 to 10 times more expensive than overhead lines. Power companies across the land, whether private like Entergy or public like the Arkansas Electric Coops, have made the decision to stay with overhead lines, wherever possible.