Republican Gov. Jeff Landry’s State of the State address was the longest in recent history, and perhaps the most fraught with political peril for its speaker.
Much of what he spoke about tended very much in the other direction. He had plenty of good economic news that he used to draw a deep contrast with conditions under his predecessor Democrat former Gov. John Bel Edwards, who typically used his such speeches to stump for tax increases, higher costs for doing business, and greater government largesse accompanied by bigger government. That Louisiana depopulated and sank on most economic indicators during those eight years testify to the refreshing change Landry and a Legislature with more inspired leadership and membership to follow to have implemented a (so far, slightly) smaller and smarter government agenda.
In another area and less obviously, Landry drew another contrast. Edwards and his leftist allies ran a con game about health care, where they defined higher spending on it and to more people as a badge of compassion, regardless of the counterproductivity and wastefulness of that approach (consistent with liberal ideology) that abandons any attempt to infuse personal responsibility into the health care equation.
Landry spoke countering that. Often unacknowledged in debates about American health care costs and outcomes is that while the system is very good and relatively low cost in addressing more extreme and emergency needs, lifestyle choices needlessly drive up costs at the primary and chronic ends. Refreshingly, Landry noted his (and others’ across the country, driven by Landry ally GOP Pres. Donald Trump) Make America Healthy Again initiative that promotes incentives for lifestyle changes that prevent chronic ailments costly to treat, an approach that could trigger significant savings in the coming years.
That understanding of behavioral change paying off years down the road, however, seemed to elude him on the topic to which he devoted the most attention: vehicle insurance reform. The issue doesn’t go away, as he lamented, because Louisiana has among the highest rates in the country that have changed little, even after insurance reforms passed in 2020 that made the policy environment a bit more friendly to insurers.
This, he argued, validated the “middle way” approach he of late has adopted as his policy response to bringing down rates, where he declares the problem a product of both insurers and trial lawyers wanting to maximize gains. Obviously both have that incentive, and his solution is to make policy changes that he claims disfavor both, although what he cited seemed to tilt more in favor of insurers.
But his formulation suffers in that the Louisiana legal environment compared to other states’ allows way too much judicial intervention into awards questions, meaning policy must primarily address that imbalance. His approach, then, faced with scales tilted more heavily towards litigation than they should be, wouldn’t go far enough; whether that is the case will become obvious as the session goes along, although already he seems to be more open to ideas that curtail litigation than previously.
Yet his problem comes in that he defines the necessity for his approach through an appeal to recent rates changes (or lack thereof), when in fact so many other and significant factors affect rates in a long-term process. The 2020 reforms that didn’t make these changes retroactive only now are taking hold as cases wend their ways through the judicial system. Landry defines the need for his changes as rates not going down since, but neither will his supported changes if adopted bring rates down any time soon for the same reason, setting up critics who then can claim his reforms didn’t work.
Worse, capricious fortune could make his enacted agenda look like a failure if dependent on raw rates solely as the metric for measurement of success. One big hurricane that wrecks tens of thousands of cars could make it many years before rates go as low as they are now even at this exalted level, allowing critics using his own mode of analysis to proclaim his ideas made things even worse.
The lodestar of reform should be to make Louisiana’s legal environment for insurance look much more like other states’, which then will alter the behavior of claimants and defendants that drives down legal costs, and not evaluate it entirely on premiums. Justifying his agenda on the basis of costs risks hoisting himself on his own petard when results don’t come fast and if they are swamped by extraneous factors. A successful governorship to date could get dashed upon the rocks if Landry boxes himself into a no-win situation where only good luck can save him.
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