Presumed Republican presidential nominee Donald Trump hasn’t exactly been forthcoming in his plans for the US health insurance market. When asked during a debate what he planned to do after repealing the Affordable Care Act, Trump responded by saying he would create something “wonderful,” and allow the sale of insurance across state lines.
Establishing a “national market” for health insurance remains a popular idea among Republicans, and supporters say the removal of state barriers will create more competition and bring down the cost of health insurance.
However, Kaiser Health News’ Julie Rovner said the idea is not so simple.
In the first of a series of videos called “Sounds Like a Good Idea,” Rovner examines interstate selling – a proposal that has been around since at least 2005 – by looking at three states that already allow it: Georgia, Maine and Wyoming.
Despite these allowances, and the agreement to it in the Affordable Care Act, “not a single insurance company has offered to sell a product approved in one state to people in another state,” Rovner says.
For one thing, complicated policies designed to limit costs make it difficult to create “one size fits all” policies that work in multiple areas – particularly due to network limitations.
“If you’re in Florida and you want to buy a plan from North Dakota, it’s unlikely that North Dakota plan will have many healthcare options for you in the Sunshine State,” she said.
Yet the idea remains popular. Proponents say creating a national market would allow consumers to save money by buying cheaper insurance plans from states that require fewer benefits, which translates to less expensive premiums.
The Affordable Care Act did cut back on these differences between states by creating minimum standards of care, but most Republican plans – including Trump’s – count on the repeal of the health law.
Rovner and other detractors, however, say this plan would actually incite a “race to the bottom” in which the insurance industry would come to resemble the credit card industry, with carriers moving to states with the loosest regulations on benefits and sales practices.
“That could draw the healthier people out of their home states, leaving behind sicker people and causing insurance premiums there to rise,” Rovner said. “That could put consumers on the hook if something happened.”
Regulatory issues would also be difficult. If a patient wanted to make a complaint regarding an out-of-state insurance policy, he or she would find their insurance commissioner powerless to do anything about it.
“In short, selling insurance across state lines sounds like it would be a good idea, but it hasn’t worked so far,” she said.