Selling insurance across state lines easier said than done

Monday, October 2, 2017
 | 
Chris Woodward (OneNewsNow.com)

healthcare costsPresident Trump may sign an executive order this week that allows people to purchase insurance across state lines, but consumers are being advised not to get too excited about it.

For years, critics of ObamaCare and health insurance overall have talked up the need for people to be able to purchase health insurance from any state, the idea being that it would create competition and drive-down prices. Senator Rand Paul (R-Kentucky) supports the idea and included it in his bill this year to repeal and replace the Affordable Care Act. Following a string of healthcare failures on Capitol Hill, President Trump plans to issue an order this week allowing people to buy insurance across state lines.

Manning

"I want to caution people to not get too excited about President Trump's executive order," warns Hadley Heath Manning, director of policy at the Independent Women's Forum (IWF). "While the Affordable Care Act continues to be law, and while the federal regulations related to the Affordable Care Act continue to be law in all 50 states, there's really not a lot of room for variability in what insurance products carriers can offer."

Yevgeniy Feyman, adjunct fellow at the Manhattan Institute, feels the same.

"Let's say you got rid of every possible barrier to selling insurance across state lines, you told states [they were] no longer going to regulate healthcare [but that] the federal government will and we're going to set this single, universal standard – most likely insurers wouldn't really want to do that," says Feyman.

Feyman

"Insurers in New York don't really know how to build networks in Pittsburgh or in the middle of Iowa," he continues. "They're not going to risk coming out there, and that's fundamentally what we've seen under ObamaCare."

According to Feyman, there's a way for states to sell insurance across state lines through what's known as "multi-state plans," but he says those are pretty heavily regulated and not many insurers have taken that option because it's too risky.

"There's not enough people who are interested, and the potential gains aren't worth it for them," he adds.

Meanwhile, health economist Devon Herrick wonders why this idea from Senator Paul, et al. wasn't included in recent legislation that failed to get support in the Senate. "For what it's worth, [insurance across state lines] is a good idea, but it really would have been better if it had actually been tacked on and passed as part of the Graham-Cassidy proposal," he tells OneNewsNow.

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