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<blockquote data-quote="MAKAVELI" data-source="post: 2922377" data-attributes="member: 43825"><p><a href="http://www.commonwealthfund.org/publications/blog/2017/apr/selling-health-insurance-across-state-lines" target="_blank">Selling Health Insurance Across State Lines Is Unlikely to Lower Costs or Improve Choice</a></p><p><span style="font-size: 12px"><strong>The Theory Behind Policies to Allow the Sale of Insurance “Across State Lines”</strong></span></p><p>Health insurance has traditionally been regulated by states, which, until the ACA established a set of essential health benefits and other minimum consumer protections, meant that there was significant state variation in the rules governing insurance companies and the health plans that they sell. Some states have had numerous requirements mandating coverage of certain benefits, such as autism treatment, diabetes screening, or mammograms, while others have taken a hands-off approach to benefit design. Similarly, before the ACA prohibited charging women or people with preexisting conditions more for their coverage, some states limited insurers’ flexibility in setting premiums based on characteristics of enrollees while others did not.</p><p></p><p>The concept of selling insurance across state lines, which <a href="http://healthpolicyandmarket.blogspot.com/2017/03/the-cockroach-proposalselling-insurance.html" target="_blank">dates back to the 1990s</a>, was borne out of frustration with the variation in state regulation. Proponents contend that if an insurance company were allowed to operate by the rules of just one state but sell plans in multiple states, they could lower the price of their plans, giving consumers new and more affordable choices.</p><p></p><p><span style="font-size: 12px"><strong>When Theory Collides with Reality</strong></span></p><p>While the frustration with the costs of our current health care system is well-founded, proposals to allow cross-state sales will do nothing to encourage greater competition or address the underlying drivers of health care costs. Just like politics, health insurance is local. Today’s health plans essentially provide enrollees with access to a local network of doctors and hospitals at a discounted price. According to many <a href="http://www.actuary.org/files/publications/AcrossStateLines_021317.pdf" target="_blank">insurance experts</a>, the <a href="http://www.rwjf.org/content/dam/farm/reports/issue_briefs/2012/rwjf401409" target="_blank">primary barrier</a> for an insurer looking to enter a new market is not the state’s regulations, it’s the cost of building up a provider network at discounted prices.</p><p></p><p>To date, <a href="http://www.rwjf.org/content/dam/farm/reports/issue_briefs/2012/rwjf401409" target="_blank">six states</a> have enacted laws to allow cross-state sales: Georgia, Kentucky, Maine, Rhode Island, Washington, and Wyoming. Yet none of these states has had a single new insurer enter its market because of its law. <a href="http://www.rwjf.org/content/dam/farm/reports/issue_briefs/2012/rwjf401409" target="_blank">When asked about their laws</a>, state officials and insurance industry experts in those states agreed that establishing a competitive provider network is the primary barrier to new market entrants. They also observed that the sheer complexity of how insurance products are developed, priced, and regulated makes it difficult to establish a single cross-state framework for consumer protection.</p><p></p><p>At the same time, there is a significant risk that if the ACA’s insurance reforms are repealed, and Congress enacts legislation to mandate cross-state sales, it could lead to <a href="http://www.actuary.org/content/selling-insurance-across-state-lines-0" target="_blank">adverse selection</a> in many states. Without a federal minimum standard of protections, some multistate insurers with national or regional networks could take advantage of the exemption from a state’s standards for benefit design, premium rating, and other consumer protections. This would enable them to attract younger and healthier enrollees than local insurers who must comply with their state’s laws. This, in turn, could threaten the long-term viability of local insurers, increase premiums, and reduce consumers’ choices.</p><p></p><p><span style="font-size: 12px"><strong>Looking Ahead</strong></span></p><p>Across-state-lines <a href="https://www.congress.gov/115/bills/hr314/BILLS-115hr314ih.pdf" target="_blank">legislation pending</a> in Congress would effectively force states to allow interstate sales. However, if President Trump wishes to fulfill his campaign promise to encourage health insurance to be sold across state lines, he need look no further than current law and his own HHS Secretary. He is likely to find—as six states have already found—that cross-state sales will do nothing to improve consumers’ choices or lower premiums.</p><p></p><p>To learn more, see our explainer <em><a href="http://www.commonwealthfund.org/publications/explainers/2017/apr/selling-ins-across-state-lines" target="_blank">Essential Facts About Health Reform Alternatives: Allowing Insurance Sales Across State </a>Lines</em></p></blockquote><p></p>
[QUOTE="MAKAVELI, post: 2922377, member: 43825"] [URL="http://www.commonwealthfund.org/publications/blog/2017/apr/selling-health-insurance-across-state-lines"]Selling Health Insurance Across State Lines Is Unlikely to Lower Costs or Improve Choice[/URL] [SIZE=3][B]The Theory Behind Policies to Allow the Sale of Insurance “Across State Lines”[/B][/SIZE] Health insurance has traditionally been regulated by states, which, until the ACA established a set of essential health benefits and other minimum consumer protections, meant that there was significant state variation in the rules governing insurance companies and the health plans that they sell. Some states have had numerous requirements mandating coverage of certain benefits, such as autism treatment, diabetes screening, or mammograms, while others have taken a hands-off approach to benefit design. Similarly, before the ACA prohibited charging women or people with preexisting conditions more for their coverage, some states limited insurers’ flexibility in setting premiums based on characteristics of enrollees while others did not. The concept of selling insurance across state lines, which [URL='http://healthpolicyandmarket.blogspot.com/2017/03/the-cockroach-proposalselling-insurance.html']dates back to the 1990s[/URL], was borne out of frustration with the variation in state regulation. Proponents contend that if an insurance company were allowed to operate by the rules of just one state but sell plans in multiple states, they could lower the price of their plans, giving consumers new and more affordable choices. [SIZE=3][B]When Theory Collides with Reality[/B][/SIZE] While the frustration with the costs of our current health care system is well-founded, proposals to allow cross-state sales will do nothing to encourage greater competition or address the underlying drivers of health care costs. Just like politics, health insurance is local. Today’s health plans essentially provide enrollees with access to a local network of doctors and hospitals at a discounted price. According to many [URL='http://www.actuary.org/files/publications/AcrossStateLines_021317.pdf']insurance experts[/URL], the [URL='http://www.rwjf.org/content/dam/farm/reports/issue_briefs/2012/rwjf401409']primary barrier[/URL] for an insurer looking to enter a new market is not the state’s regulations, it’s the cost of building up a provider network at discounted prices. To date, [URL='http://www.rwjf.org/content/dam/farm/reports/issue_briefs/2012/rwjf401409']six states[/URL] have enacted laws to allow cross-state sales: Georgia, Kentucky, Maine, Rhode Island, Washington, and Wyoming. Yet none of these states has had a single new insurer enter its market because of its law. [URL='http://www.rwjf.org/content/dam/farm/reports/issue_briefs/2012/rwjf401409']When asked about their laws[/URL], state officials and insurance industry experts in those states agreed that establishing a competitive provider network is the primary barrier to new market entrants. They also observed that the sheer complexity of how insurance products are developed, priced, and regulated makes it difficult to establish a single cross-state framework for consumer protection. At the same time, there is a significant risk that if the ACA’s insurance reforms are repealed, and Congress enacts legislation to mandate cross-state sales, it could lead to [URL='http://www.actuary.org/content/selling-insurance-across-state-lines-0']adverse selection[/URL] in many states. Without a federal minimum standard of protections, some multistate insurers with national or regional networks could take advantage of the exemption from a state’s standards for benefit design, premium rating, and other consumer protections. This would enable them to attract younger and healthier enrollees than local insurers who must comply with their state’s laws. This, in turn, could threaten the long-term viability of local insurers, increase premiums, and reduce consumers’ choices. [SIZE=3][B]Looking Ahead[/B][/SIZE] Across-state-lines [URL='https://www.congress.gov/115/bills/hr314/BILLS-115hr314ih.pdf']legislation pending[/URL] in Congress would effectively force states to allow interstate sales. However, if President Trump wishes to fulfill his campaign promise to encourage health insurance to be sold across state lines, he need look no further than current law and his own HHS Secretary. He is likely to find—as six states have already found—that cross-state sales will do nothing to improve consumers’ choices or lower premiums. To learn more, see our explainer [I][URL='http://www.commonwealthfund.org/publications/explainers/2017/apr/selling-ins-across-state-lines']Essential Facts About Health Reform Alternatives: Allowing Insurance Sales Across State [/URL]Lines[/I] [/QUOTE]
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