13 Mar 2017 9:12 pm
Republicans are always saying that we should allow health insurance companies to sell across state lines.
I heard a few people say lately that health insurance companies don't really want to sell insurance across state lines, so I looked it up.
I heard a few people say lately that health insurance companies don't really want to sell insurance across state lines, so I looked it up.
The problem with GOP plan to sell health insurance across state lines.
The idea of developing a more national market for health insurance has become a major part of Republican health reform orthodoxy.
A bill to allow interstate insurance sales was introduced in Congress in 2005 and since then has been a part of the platform of every Republican presidential nominee.
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The idea is that by eliminating the red tape associated with state insurance regulation, insurers will be able to offer national plans with lower administrative costs.
That would expand consumers’ choices and reduce the price of insurance.
The proposals also all assume that, in place of expensive regulations in some states, insurers would have the option of choosing to base their companies in a state with fewer rules.
In some versions of the plan, they would have to comply only with basic federal requirements that would apply everywhere.
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The trouble is that varying or numerous state regulations aren’t the main reason insurance markets tend to be uncompetitive.
Selling insurance in a new region or state takes more than just getting a license and including all the locally required benefits.
It also involves setting up favorable contracts with doctors and hospitals so that customers will be able to get access to health care.
Establishing those networks of health care providers can be hard for new market entrants.
“The barriers to entry are not truly regulatory, they are financial and they are network,” said Sabrina Corlette, the director of the Georgetown University Health Policy Institute.
In 2012, Ms. Corlette and co-authors completed a study of a number of states that passed laws to allow out-of-state insurance sales.
Not a single out-of-state insurer had taken them up on the offer.
As Ms. Corlette’s paper highlighted, there is no federal impediment to across-state-lines arrangements.
The main difficulty is that most states want to regulate local products themselves.
The Affordable Care Act actually has a few provisions to encourage more regional and national sales of insurance, but they have not proved popular.
Insurers have been muted in their enthusiasm for G.O.P. across-state-lines plans.
Neither America’s Health Insurance Plans, the lobbying group for most private insurers, nor the Blue Cross Blue Shield Association have endorsed such a plan when it has come before Congress.