Session Preview: Regulatory Reform Trio

Regulations are not just rules; they are a hidden tax.

While some regulation is necessary, too much stifles economic growth. The elimination of “red tape” barriers will add to and amplify the multiple pro-growth and free-market reforms Iowa has passed in recent years. Cutting back unnecessary regulation will continue to move Iowa toward a better economic climate.

1. Improving Access to Health Care Through Repealing Certificate of Need

Policymakers in Iowa can increase access to health care and improve affordability by eliminating excessive restrictions on the expansion and introduction of medical facilities. Specifically, Iowa’s Certificate of Need (CON) laws limit patient access and provider competition, providing monopoly power for established medical providers. If a new provider wants to establish a practice in the state, CON laws require the permission of existing providers.

In place since the 1970s, forty-five years of CON laws have not made healthcare in Iowa better or less expensive. To the contrary, healthcare costs have grown more than two and a half times as fast as the rate of inflation since CON was instituted. This is in no small part thanks to limited competition.

Egregious policies like this government-mandated monopoly should be addressed without the delay of lengthy review boards. Instead, the free market should determine where new health care services can be delivered. While more than 30 states have some form of CON law, state governments are beginning to wise up. In 2023, West Virginia and South Carolina both repealed their CON laws, suggesting this is the direction in which the nation is headed.

2. Encouraging Innovation Through Regulatory Sandboxes

In a rapidly evolving technological landscape, innovators in main street businesses and large corporations all need relief from outdated regulations. They often find themselves trapped in a vicious circle. Regulators are reluctant to change laws without evidence it’s the right choice, but innovators can’t demonstrate real-world proof without regulatory changes.

Regulatory sandboxes offer a solution to this conflict by enabling innovators to work with regulators and legislators to trial new products, services, and business models while regulations that don’t apply to their innovative ideas are temporarily waived. This gives regulators insights into potential changes, while still allowing supervision and oversight of inventive ideas. These sandboxes maintain market regulation while allowing for much-needed flexibility to operate.

14 other states now have regulatory sandboxes that foster innovation and reduce hurdles, and Iowa should join them. To flourish, our state needs to be a haven for innovators in fields as diverse as insurance, agriculture, and financial technologies, allowing them to create new products that can improve lives, drive down costs, and spur countless new opportunities.

3. Agency Deference Tips the Scales in Government’s Favor

The concept of agency deference has shaped the legal landscape of the United States since the Supreme Court issued a decision known as “Chevron”. The Chevron deference, named after the energy company, was a legal principle where the courts would defer to an agency decision if there existed ambiguity in an enabling statute. Its aim was to allow agencies to interpret vague language in the statutes that govern their operation.

In practice, this deference to agencies results in a shift where the courts are not interpreting the law as they traditionally have; instead, they are deferring to the agency’s interpretation of it. While it may seem like a minor matter of legal procedure, agency deference can have significant ramifications for those interacting with the law. This favoring of government agencies disturbs the balance of justice by tipping it in favor of the government.

The Iowa Legislature took several steps toward leveling the playing field for all during the 2023 legislative session. HF 645 passed the Iowa House unanimously and then advanced through the Senate Judiciary Committee, signaling the legislature’s desire for legal clarity and a fair, impartial judicial system. Anything less represents a deviation from the true spirit of American justice.

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