In selling the Tuesday Group's health care alternative, Rep. Mark Kirk likes to bring up the comparison between New Jersey (where health insurance costs $5,326 per patient) and California (where insurance costs dip to $2,565 per patient). According to the North Shore Republican, this discrepancy can be ascribed to California's stringent medical malpractice reforms and the state's large insurance pools. He made the point during his Chicago press conference in early August and repeated it Wednesday on WLS' Roe Conn Show. Listen here:

Internal mp3

KIRK: The smoking hole of health insurance in America is the state of New Jersey: no lawsuit reform, high mandates, and incredible administrative burdens. So it costs $5,550 a patient to insure in New Jersey. No wonder they have uninsured. Ironically, the best state in the country: California. But California has rock-and-rolling lawsuit reform, very large, flexible pools of insurance. They've cut their cost of health insurance in half. Just doing that alone, so that prices come down and more Americans can afford health insurance, would be a huge plus for the economy and for millions of Americans.

The comparison also popped up in the Powerpoint presentation he and Rep. Judy Biggert showed at the Naperville Chamber of Commerce earlier this week:

But there is one glaring problem:  Kirk is using out-of-date numbers.

In 2000, Families USA reported that the average annual premium (which is based on employer and worker premiums combined) in California was $2,365, just $200 less than Kirk's figure. Last year, Families USA updated the figures and found that the average premiums rose $1,917 over the subsequent seven years, up to $4,282. Moreover, the organization estimates that the average cost of individual health coverage in New Jersey two years ago was only $4,744, a difference of just $462. Because Kirk doesn't provide a citation (not even in the Powerpoint), it's unclear where he is getting these particular numbers.  But it appears he is greatly overstating the disparity.

Interestingly enough, over the last decade premiums for publicly-purchased insurance in California rose much less slowly (between 2-4 percent per year) than premiums for employer-provided health insurance (10 percent).

Still, the most recent figures do show California offering slightly lower premiums. Is medical malpractice reform the reason? The conclusions Kirk reaches aren't nearly as clear as he claims. The California-based Foundation for Taxpayer and Consumer Rights, a consumer watchdog group, argues that health insurance costs dropped only after Proposition 103 went into effect, which mandated that rates be immediately rolled back by 20 percent and frozen by insurers. For a point of comparison, after medical malpractice caps were implemented in 1976, premiums subsequently rose by 190 percent over the next 12 years.

Kirk is correct in asserting that California offers large insurance pools that can negotiate deeper discounts with health plans, insurers, physicians, and hospitals. But he omits the fact that folks insured in the Golden State are still protected by state regulations. Under his plan, which would allow individuals to purchase coverage through interstate pools, insurance companies -- like credit card companies did in the 1970s -- would move their operations to states with the most lax laws. We can expect the individual market to become even more ruthless than it is now.  In a comment to our Kirk-related post from yesterday, Ellen Beth Gill summed it up:

Each state has an insurance regulator. In Illinois we have a pretty good agency that does that., the Illinois Department of Insurance. You can report bad insurer behavior to them. For example, if your insurer cancels you without the property notice, you can report it. They will help you. Kirk and Biggert do not want you to have that place to call. They do not want you to have that protection. There is no federal department of insurance and their bill does not propose one. There are no federal insurance rules and their bill does not propose any. They want you to be on your own against huge national insurance monopolies. That is reform to Kirk and Biggert.