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Ron Peterson's Stand for Principle

June 10, 2008 - 2:55pm CDT

Late in this year’s legislative session, early in a long interview at his state capitol office, state Rep. Ron Peterson (R-Tulsa) responded to this reporter’s jabs with a big grin: “I’m not the devil!”

God blessed Oklahoma in late May. The legislature adjourned. But during the session, Peterson took a lot of hits for his conservative (in the traditional sense of the word) position on government imposition of health insurance mandates.

Peterson stood firm against a mandate for autism coverage—understandably desired by parents of children with the condition and pressed by legislative Democrats with the help of a largely sympathetic news media.

The agency which administers state government insurance programs estimated the autism mandate would increase insurance costs by about $6 million. Peterson says analysts tell him the impact could be worse—a cost multiplier of four to 10 percent. But an argument from principle is, for him, more fundamental than clashes over costs.

Do You Believe in Free Enterprise, or Not?

“The controversy comes from a starting point, where you are philosophically opposed to government interference in economic activity,” Peterson told me. “I remember the creed I used to recite as a Jaycee, wherein we stated our belief in free enterprise. What was so self-evident then is under attack here at the capitol every day.”

Like other libertarians and conservatives, Peterson believes “markets work. Competition works and that will address the issues of health care and insurance better than mandates. Mandates in the area of health insurance? I’m dealing with them all the time as a committee chairman.”

Peterson said “at least a dozen” mandates were actively discussed or introduced this year. As he explained, “Mandates come at a cost, and that cost gets passed on to all consumers. In health insurance, we’re in a crisis in terms of affordability, and it seems foolish to me to be entertaining mandates that lead to higher costs.”

Pressed to elaborate, he continued, “If we’re going to consider mandates at all, it seems each one should stand on its own merits.” Peterson advanced a bill that would have required “actuarial analysis for any mandate legislation. I thought we should be careful on any and all mandates, so that if one is considered, it’s done from a position of knowledge, not emotion.” But the measure was killed by Senate Democrats.

Proposals along the same line have actually drawn a sympathetic response from state Insurance Commissioner Kim Holland, who understands the business of insurance. In my own view, the clearest sign that the attacks on Peterson were political, rather than principled, is that the same politicians bashing him never raised the issue, at least not publicly, with her.

Peterson still believes he has the right idea: “How can it equate that a mandate would not cost? Because risk is spread, proponents argue this would not increase costs. But every mandate has a cost.” The wrenching issue of insurance coverage for autism aside, the Council on Affordable Health Insurance estimates that the typical mandate raises costs an average of one percent.

Quarrel with that estimate or not, but markets always respond to costs and to regulation, whether we want them to or not. And aside from cost disputes, there are questions about the efficacy of the specific autism mandate being advanced during the legislative session.

Peterson commented, “What’s being suggested is clinically unproven. The medical profession has stated that there’s no reason to believe behavioral therapy is any more effective than anything else. The results are described as marginal in any case, and these individuals will be wards of the state in any case. So you’d have the cost without any benefit, as best we can see.”

At the state legislature, is the problem fiscal and medical ignorance, or partisan politics? “It’s a combination of both those things,” Peterson said. “Legislators are geared, we are wired, to please constituents and to please those who ask us for things, to say yes. We are ill-equipped to withstand this kind of pressure. And, there is no reward or little reward for saying no. People want, and need, relief. I understand that. But the only way to deal with issues like mandates is to arm yourself with knowledge and understand there are consequences, sometimes serious consequences, that cause more harm than good.”

Mandates Increase the Number of Uninsured

Specifically, he said, “one consequence of increasing mandates is clear: there are proportionately more uninsured people than there were before. Small business clients who want to provide health insurance can no longer afford it. I can’t go along with such a mandate, especially when we are in a full-blown crisis in terms of basic coverage.”

I wondered, out loud, how many lobbyists and citizens are roaming the halls of the legislature demanding more mandates—or taxes or regulations or interference in the economy—versus how many are defending economic freedom?

“The answer is simple,” Peterson responded. “There are very few out here at the capitol defending market principles and limited government. I’d say the proportion is about nine out of 10 are in the first category. And that’s probably an under-estimate. The people who will be uninsured if we pass this or many mandates like it, I guarantee you they will never be heard. They are, from a political standpoint, unrepresented. In general, the special interests are well represented. The taxpayers are underrepresented.”

This year, Republican committee chairmen have been under attack in some quarters for their management of hearings. Peterson was attacked for not granting unscheduled time to advocates of the autism mandate. He explained his perspective as follows:

“I told the supporters I would not hear their proposal. I spoke with them and made it clear they had to follow the same procedure as everyone. But someone else gave them the impression they could get an amendment in that was after the right time in the process. They showed up and they said they’d been told they would get a chance to push that amendment in committee. But they had no amendment filed that was relevant. They were upset when I stuck to what I’d said.”

In his view, “committee meetings are not town hall meetings. The committees and the process of committees do serve as a ‘gatekeeper’ on legislation. Everyone follows that process, or nothing gets done. Our leadership is not prepared to pass a mandate given the crisis we face in access to insurance. This is a philosophical objection, and an honest one.”

While studying at the University of Oklahoma’s excellent Economic Development Institute (EDI), I observed a pervasive sympathy, even from many people in business, for government intervention in health insurance. I asked Peterson what lies behind this.

“With health care in general, the government has set rules that must be observed,” Peterson said. “I accept that is where we are. But there are already some 30 mandates on the books. Instead of creating more, we need to bring consumerism into the system, a sense of allowing individuals to control their own destiny. We should allow more options.

“For the most part, now, those with coverage have either self-insurance of a sort that allows lower-cost insurance premiums to protect primarily against catastrophic events, or they have standard policies with coverage and co-pays. Most of the products are non-differential. To make an analogy, most of those covered are either walking or they’re driving a Lexus. We need a greater range of choices, to let consumers drive the market instead of government.”

Looking to the future, Peterson said he will not change his basic principles, but he reflects, “As for families who face conditions like autism, I have great compassion for them. I’m just not willing to make insurance even less affordable for those who are already having trouble getting and keeping basic health insurance coverage.”

Profiles in Courage

John F. Kennedy’s Pulitzer Prize-winning Profiles in Courage is among the more readable books of the second half of the 20th century. The future president went out of his way to tell stories about not only those with whom he shared 1950s-style liberalism, but also about a few conservatives. One glowing tribute went to Republican U.S. Sen. Robert Taft of Ohio, known in that generation as “Mr. Conservative.”

OCPA believes in freedom—economic freedom and educational freedom. This year we have spotlighted Democratic legislators for their truly courageous leadership on the issue of school choice.

Ron Peterson deserves similar recognition. He’s got heart, passion, and sincerity going for him. And for standing up to the regnant assumption that virtually every human problem requires a government solution—and bringing the party of conservatives along with him—Ron Peterson should be applauded.

Pat McGuigan (M.A. in history, Oklahoma State University) is an OCPA research fellow and an editor at The City Sentinel, a weekly newspaper in Oklahoma City.