State Health Care Plans

I just want to make sure we all saw the interesting juxtaposition on WSJ.com today. First, "State-Run Health Plans Garner Support":

A new proposal by Sen. Tom Carper would spell out how to boost competition in the private market by enacting government-run plans at the state level. States could act alone or in concert with others to gain more leverage in the marketplace, and would be bound by the same rules established for private companies using the national insurance exchange envisioned by the Senate Finance bill. Another option would entail states opening their workers' employee-benefit plans to the general public. ...

"Conceptually, having the states take responsibility makes a great deal of sense," said Nebraska Sen. Ben Nelson, a key voice for moderate Democrats. "It is important that we really take a close look at this." He noted that states are already in the health-insurance business because they administer Medicaid and other federal-state programs.

I'm totally on board with the idea of states being a laboratory of federalism, but I can't help noticing that their track record isn't all that great, which leads to the second key article, "The Lesson of State Health-Care Reforms":

Like participants in a national science fair, state governments have tested variants on most of the major components of the health-care reform plans currently being considered in Congress. The results have been dramatically increased premiums in the individual market, spiraling public health-care costs, and reduced access to care. In other words: The reforms have failed.

A litany of failed reforms follows.

One thing seems clear. If we are to let states experiment, we have to give them free rein. The federal government should not set parameters that restrict state freedom. If some state wants to experiment with single payer, so be it (I'd not move there). If some state wants to experiment with a combination of individual payer, tax-advantaged health savings accounts, and state-backed catastrophic insurance, I'd love it. The main thing is to provide a truly free arena in which real experiments can occur. Otherwise, the laboratory of federalism will prove wholly uninformative.