Since the very beginning of his campaign Donald Trump has declared his intention to repeal and replace Obamacare. According to the Boston Globe, the newly elected President and the Republican leaders in Congress will continue to push the idea of allowing health insurers to sell across state lines.This idea also won the approval of House Speaker Paul Ryan, who proposed a health care plan as well. Here are more insights on the matter.
Up to date, insurers are obliged to follow the laws of every state where they sell health insurances. The changes that Trump wants to implement would allow insurance companies to sell their plans throughout different states. This means that any health insurer licensed in Chicago, Illinois would be able to sell coverage to clients in Florida, for example. Experts believe this might lead to better service and a greater choice for clients as competition will rise and so will the variety of plans. It is also a way to deal with the monopoly in the sector.
As a result, costs will also drop which, according to Trump, may resolve the problem with the ever-escalating health care costs. In contrast, health care specialists warn that such change might lead to massive disruption in the insurance industry, affecting consumers protection and some core health care reforms. The Wall Street Journal has reported that Trump’s idea is welcomed with great suspicion by state insurance regulators, the industry and independent health care analysts. According to them, this has already been tried out and did not work out as expected. What is more, Edmund Haislmaier, a senior research fellow at the conservative Heritage Foundation, stated that the interstate insurance might bring some benefits but it will definitely not solve the problem with the non-stop flying prices.
In 2010 the Obamacare law set some ground rules for insurers who are part of the subsidized health insurance program. These regulations resolved around a strict prohibition against considering whether an applicant is suitable or not depending on his past medical conditions. The insurers can only consider the applicant’s age and location when selecting premium prices.
The National Association of Insurance Commissioners announced that while some say interstate sales health insurance policies might make coverage more affordable the reality check shows similar practices led to the financial collapse in the past years. What the association fears is that “It would also make insurance less available, make insurers less accountable, and prevent regulators from assisting consumers in their states”.
State officials also complain that interstate insurance will affect the state’s traditional role in regulating the industry and will increase the government’s influence in the sector.
Another question that specialist raise is which regulations and requirements will last and will insurers tend to choose to sell coverage in states where the standards are looser. The National Association of Insurance Commissioners also warns that “interstate sales will start a race to the bottom by allowing companies to choose their regulators.” As a result this might lead to a scenario where the youngest and healthiest customers will pay the least expensive premiums while the sick and old will face a challenge.
Last but not least, cross state insurance sales might also increase fraud or any other irregularities such as the lack of proper network. In order to sell insurance policy, insurers should have a local network of hospitals and doctors so how would this work out when it comes to other states.