This one isn’t going to help John McCain out a lot, especially after “fundamentals of the economy” earlier this week.  McCain recently wrote an article for the magazine Contingencies.  Everybody else is posting what likely to be the out-of-context thing going around this week, so here’s the full paragraph, and then my analysis after the jump (emphasis on the line being used in all the blogs):

I would also allow individuals to choose to purchase health insurance across state lines, when they can find more affordable and attractive products elsewhere that they prefer. Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation. Consumer-friendly insurance policies will be more available and affordable when there is greater competition among insurers on a level playing field. You should be able to buy your insurancefrom any willing provider—the state bureaucracies are no better than national ones. Nationwide insurance markets that ensure broad and vigorous competition will wring out excess costs, overhead, and bloated executive compensation.

Seriously, when read in context, it doesn’t seem as bad, though McCain doesn’t explain what he means by the banking deregulation (though because he talks about the last decade he undoubtedly includes the legislation written by Phil Gramm in there).

For those not as familiar with the U.S. insurance industry, here’s my understanding: Right now, insurance companies often offer different plans in different states because different state regulations do not allow them to offer quite the same plans everywhere.  McCain’s health plan would allow insurance seekers to cross state-lines and buy those plans, increasing choice for them.

So, that seems to be what McCain is discussing when he wrote that line.  And the plan does sound pretty good to me.  However, here’s my nitpick with the example he chose to use in the likely to be oft-quoted sentence:

The banking deregulation seems to be more of a win to internal operations of a company.  For example, we’ve seen a massive amount of conglomeration in terms of financial companies since the Gramm Act passed.  And it’s also my understanding that the mergers haven’t gone as well as companies would have liked, because they’ve found it difficult to merge banking and other financial operations, such as investments.  So, while the deregulation has allowed companies to conglomerate, and in some ways have allowed consumers more choice (e.g. perhaps go with a name they recognize), in practice, it seems more advantageous for the corporations than the consumers.

McCain’s healthcare plan, on the other hand, seems more advantageous to consumers than the corporations.  Under his plans for deregulation in the healthcare insurance industry, consumers will simply be able to choose from more plans than they were before. Now, perhaps McCain is also suggesting that different types of healthcare companies will also be able to conglomerate as well?  Allow corporations to start owning medical supply and pharmaceutical operations as well as insurers, in order to decrease the overhead necessary in negotiating prices?  If he is, he should speak up, because that’s not what I’ve seen his plan discuss.  Maybe I just missed that part, so feel free to let me know.

So, I do scratch my head a little on why he chose banking deregulation to compare with healthcare deregulation, as right now, it seems like comparing apples and oranges.  So for that alone he should have gotten a proofreader.  Yet, when read out of context, and even slightly so in context, the sentence really does insinuate conglomeration of healthcare operations.  So, I think the example chosen to compare his health-care plan to was really bad, especially given the last week on Wall Street.

Personally, I’d actually probably not support the conglomeration of some healthcare operations with others.  Can you imagine an insurance company buying up pharmaceutical companies?  Then we might start having insurance policies that only allow you to use the medicines their pharmaceutical division is making.