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Should health insurance companies be allowed to cross state lines?

Should health insurance companies be allowed to cross state lines?

  • yes

    Votes: 28 90.3%
  • no

    Votes: 2 6.5%
  • not sure

    Votes: 1 3.2%

  • Total voters
    31
Of course they wouldn't but that's a decision based on market economics. As I understand it now they can't because of legal restrictions. Horse of a different color.

What "legal restrictions"?

Different states have different laws. That is THE obstacle. I've never heard of a state law "you're not allowed to offer insurance anywhere else in the world" i don't think any such laws exist.
 
How? Its the providers charging exorbitant prices that are the reason why health insurance is expensive. BCBS and Humana are not raping you on costs, its your cardiologist, anesthesiologist, and orthopedic surgeons that are. Your health insurance premiums are just a reflection of that.

But it's the amount of profit margin we are talking about. You can still lower prices of your insurance and still make money.
 
More competition will drive health insurance costs down.

That would only be true if all the excessive profits were consolidated in insurers, which they are obviously not as insurers are pulling out of red markets where the ACA was sabotaged by republicans.
 
The main problem caused by preventing insurance companies from crossing state lines is that you may be stuck with terrible insurance in one state while in others, there are only a few options and it could create monopolies.

That idiotic meme is worse than that. There are no laws preventing Ins. Cos. from "crossing State lines". The reason they do not is that they need to set up in State networks to provide treatment for their customers in order to sell insurance. That means they are no longer "out of State". This meme really says "We have no clue how insurance works but it sounds good to other idiots like us so we will run with it".
 
They already can cross state lines. They generally don't want to because there are different laws and different healthcare providers to negotiate with in each state.

The "across state lines" republicans love is really about undermining laws and regulations at the state level so that insurers can more easily sell across state lines.

And, keep in mind, there's basically nothing to gain by doing it.

Auto insurance is sold across state lines by large national corporations all the time. They abide by individual state laws and what they gain is even more profit.

My son worked for Geico at one time. He was licensed to sell in nine states. Laws differ from state to state. The company has to abide by that state's laws before they can sell. Agents have to be licensed to sell in a given state. No reason whatsoever health insurance has to be different.
 
Yes, because each state has its own laws.

If you're going to take away state sovereignty at the federal level, you have to replace all the purposes of all those that are being federally smashed for no discernible gain.

Thank you for not reading the post to which I responded. I've taken nothing away nor do I propose that anything be taken away. Jees.
 
Auto insurance is sold across state lines by large national corporations all the time. They abide by individual state laws and what they gain is even more profit.

My son worked for Geico at one time. He was licensed to sell in nine states. Laws differ from state to state. The company has to abide by that state's laws before they can sell. Agents have to be licensed to sell in a given state. No reason whatsoever health insurance has to be different.

That's how health insurance works.
 
The main problem caused by preventing insurance companies from crossing state lines is that you may be stuck with terrible insurance in one state while in others, there are only a few options and it could create monopolies.

The reason why states restrict who can sell insurance within their state is because each state has different laws determining what must be covered in order to constitute real insurance. For example, Florida may have special provisions requiring good coverage for skin cancer treatments whereas, Minnesota may want to insure injuries do to falling on ice are fully covered.

This creates a problem because obviously Florida wants good skin cancer coverage because there is an inordinately high number of people in the state who get skin cancer. An insurance company would therefore have a difficult time tailoring an insurance policy to the state of Florida unless it had confidence that it would have a reasonably high market share within that state. So in exchange for creating a policy for Florida an insurance company wants guarantees from the state about how much competition they'll have.

If you want insurance companies to compete across all states you need to have more uniform laws on what must be covered. This one of the things that Obamacare tried to accomplish, but it requires more cooperation from the states.
 
Auto insurance is sold across state lines by large national corporations all the time. They abide by individual state laws and what they gain is even more profit.

My son worked for Geico at one time. He was licensed to sell in nine states. Laws differ from state to state. The company has to abide by that state's laws before they can sell. Agents have to be licensed to sell in a given state. No reason whatsoever health insurance has to be different.

Yes there is. Car insurance covers a car, and puts reasonable limits on how much it will have to pay out for an accident. Health insurance covers people, and the costs that could potentially be associated with repairing a person are much much much higher than any car.

There's also the fact that most states force all car owners to have at least liability coverage in their state. This creates a much larger pool for insurers to choose from so catering their policies to individual states becomes much easier. They know that auto owners can't choose to simply not have insurance so they can feel free to raise their rates knowing that it will not drive away customers unless their competition can beat it which they can't since they have to play be the same rules.
 
But it's the amount of profit margin we are talking about. You can still lower prices of your insurance and still make money.

OK, lets say your premium on the individual market for your family is 20k a year. The insurance company through intense competition cuts its margin by 4%. Then your premium is say $19,400. Its a savings, but its not the problem. The premium is still exorbitantly high due to the cost of the providers. Moreover, an out of state insurer has to be able to develop and negotiate rates in a market to compete anyway. Which is hard to do if they don't have a very significant customer base in that market.

The problem is not insurers, its providers.
 
What "legal restrictions"?

Different states have different laws. That is THE obstacle. I've never heard of a state law "you're not allowed to offer insurance anywhere else in the world" i don't think any such laws exist.

In all but 4 or 5 states consumers cannot buy policies from out of state insurance companies. State laws regulating insurance often impose barriers and/or mandates that make it difficult for out of state providers to enter the market. While you're correct that the law doesn't specifically say "A Florida insurance company cannot sell insurance in NY" the regulatory scheme is such that that is the reality.
 
Thank you for not reading the post to which I responded. I've taken nothing away nor do I propose that anything be taken away. Jees.

I read the post you responded to.

I wasn't trying to refer to you, personally, i was trying to speak more generally. "Selling across state lines" sounds good, but that's simply what it's about, it's about undermining local and state laws so that it's easier for insurers to cover larger regions, which i consider a dubious gain.

Sorry for the misunderstanding, my verbiage was terrible.
 
Auto insurance is sold across state lines by large national corporations all the time. They abide by individual state laws and what they gain is even more profit.

My son worked for Geico at one time. He was licensed to sell in nine states. Laws differ from state to state. The company has to abide by that state's laws before they can sell. Agents have to be licensed to sell in a given state. No reason whatsoever health insurance has to be different.

Blue cross blue shield operates in some capacity across all 50 states. Please explain to me how that's possible if there are hypothetical laws preventing exactly that.
 
I read the post you responded to.

I wasn't trying to refer to you, personally, i was trying to speak more generally. "Selling across state lines" sounds good, but that's simply what it's about, it's about undermining local and state laws so that it's easier for insurers to cover larger regions, which i consider a dubious gain.

Sorry for the misunderstanding, my verbiage was terrible.

Noted.
 
Auto insurance is sold across state lines by large national corporations all the time. They abide by individual state laws and what they gain is even more profit.

My son worked for Geico at one time. He was licensed to sell in nine states. Laws differ from state to state. The company has to abide by that state's laws before they can sell. Agents have to be licensed to sell in a given state. No reason whatsoever health insurance has to be different.
I sell health insurance in 35 states. That's exactly how it is. Each state has different guidelines for health insurance.
 
(for information only)

http://www.ncsl.org/research/health/out-of-state-health-insurance-purchases.aspx

Insurance firms in each state are protected from interstate competition by the federal McCarran-Ferguson Act (1945), which grants states the right to regulate health plans within their borders. Large employers who self-insure are exempt from these state regulations. The result has been a patchwork of 50 different sets of state regulations; the cost for an insurer licensed in one state to enter another state market is often high. A growing number of state legislators are interested in whether some states allow or facilitate the purchase of health insurance across state boundaries or from out-of-state regulated companies. NCSL's state health insurance research and tracking shows a gradually growing number of states (at least 21 as of December 2016) and state legislators considering this idea during the past eight years and continuing to the present (listed below).

Note that “self-insured” or “self-funded” health coverage usually offered by large employers (especially with 500+ employees) is not regulated by states and is guided by the federal ERISA law, administered by the U.S. Department of Labor.
Federally authorized “health savings accounts” and accompanying High Deductible Health Policies (HDHPs) are exempt from much of state regulation, including some state mandates.
 
Blue cross blue shield operates in some capacity across all 50 states. Please explain to me how that's possible if there are hypothetical laws preventing exactly that.

They're still following the laws of those individual states. A BC/BS policy in Maine is not valid in Puerto Rico.
 
OK, lets say your premium on the individual market for your family is 20k a year. The insurance company through intense competition cuts its margin by 4%. Then your premium is say $19,400. Its a savings, but its not the problem. The premium is still exorbitantly high due to the cost of the providers. Moreover, an out of state insurer has to be able to develop and negotiate rates in a market to compete anyway. Which is hard to do if they don't have a very significant customer base in that market.

The problem is not insurers, its providers.

That maybe the case, but increasing competition helps. Why not reform the providers as well as allow competition across state lines?
 
OK, lets say your premium on the individual market for your family is 20k a year. The insurance company through intense competition cuts its margin by 4%. Then your premium is say $19,400. Its a savings, but its not the problem. The premium is still exorbitantly high due to the cost of the providers. Moreover, an out of state insurer has to be able to develop and negotiate rates in a market to compete anyway. Which is hard to do if they don't have a very significant customer base in that market.

The problem is not insurers, its providers.

So much this:

Moreover, an out of state insurer has to be able to develop and negotiate rates in a market to compete anyway. Which is hard to do if they don't have a very significant customer base in that market.

The barriers to entry are huge because of state laws, local laws, negotiating with networks of providers, etc.

And, by the way, when health insurers negotiate with providers, guess what, this is an instance where competition can actually make the cost of healthcare more expensive.

Let's say you have one provider network and one insurer. So eah side hires, say, two lawyers to negotiate, so four lawyers total. Customers end up paying for four lawyers.

Alternatively, let's say you have a dozen providers and a dozen insurers. Now you have 12*12=144 negotiations, each side of each negotiation consuming two lawyers puts you at 576 lawyers. Now, customers end up paying for 576 lawyers.

Walmart saves money through consolidation and bargaining power. Single payer makes use of those concepts to keep prices down.
 
They're still following the laws of those individual states. A BC/BS policy in Maine is not valid in Puerto Rico.

Yes, following laws is generally required.

So let's be honest: the title of this thread is a false premise. We already have insurance companies that can operate in all 50 states. They just have to follow the laws.

What republicans really seem to be asking for is to ignore the laws.
 
Yes, following laws is generally required.

So let's be honest: the title of this thread is a false premise. We already have insurance companies that can operate in all 50 states. They just have to follow the laws.

What republicans really seem to be asking for is to ignore the laws.
Yes, they are asking for the laws to be ignored. When it comes to health insurance, the Republicans in Congress have been a bunch of nutters.
 
So much this:

Moreover, an out of state insurer has to be able to develop and negotiate rates in a market to compete anyway. Which is hard to do if they don't have a very significant customer base in that market.

The barriers to entry are huge because of state laws, local laws, negotiating with networks of providers, etc.

And, by the way, when health insurers negotiate with providers, guess what, this is an instance where competition can actually make the cost of healthcare more expensive.

Let's say you have one provider network and one insurer. So eah side hires, say, two lawyers to negotiate, so four lawyers total. Customers end up paying for four lawyers.

Alternatively, let's say you have a dozen providers and a dozen insurers. Now you have 12*12=144 negotiations, each side of each negotiation consuming two lawyers puts you at 576 lawyers. Now, customers end up paying for 576 lawyers.

Walmart saves money through consolidation and bargaining power. Single payer makes use of those concepts to keep prices down.

Technically, if an insurer has a big enough presence they should have the same negotiating power as a single payer government entity would have. For example, if you had say 4 insurers nationwide and those 4 insurers had nationwide networks each with tens of millions of insured, they would have strong negotiating ability with providers as the providers would be missing out on the majority of the market otherwise.

The problem is that its much, much more fragmented than that on the insurance side, while on the provider side, you have many cities and areas where health systems have consolidated to the point of monopolies and thus its the insurer that must then pay whatever that provider monopoly demands or not compete at all in that area.
 
That maybe the case, but increasing competition helps. Why not reform the providers as well as allow competition across state lines?

You can already use providers across state lines. The problem is that it becomes cost prohibitive to travel hundreds of miles to use a provider that is cheaper, thus you are stuck in your local network which is often a monopoly where one health system has bought up the vast majority of providers.

What other countries do to address this problem is negotiate prices on a national level with providers. Thus every 3 years or so representatives with providers much negotiate with panels of economists and either government representatives (when you have a single payer system), or insurance reps (when you have private insurance systems), and they set prices on a nation scale. Thus a procedure is the same prices no matter where you go. They also demand far more price transparency, and commonly make providers give good faith cost estimates with patient consent forms.
 
Yes there is. Car insurance covers a car, and puts reasonable limits on how much it will have to pay out for an accident. Health insurance covers people, and the costs that could potentially be associated with repairing a person are much much much higher than any car.

There's also the fact that most states force all car owners to have at least liability coverage in their state. This creates a much larger pool for insurers to choose from so catering their policies to individual states becomes much easier. They know that auto owners can't choose to simply not have insurance so they can feel free to raise their rates knowing that it will not drive away customers unless their competition can beat it which they can't since they have to play be the same rules.

Every point you say here is merely a slightly different dynamic.

Not a single point you say here is a reason why it can't be done.
 
I read the post you responded to.

I wasn't trying to refer to you, personally, i was trying to speak more generally. "Selling across state lines" sounds good, but that's simply what it's about, it's about undermining local and state laws so that it's easier for insurers to cover larger regions, which i consider a dubious gain.

Sorry for the misunderstanding, my verbiage was terrible.
Local and state laws do not have to be undermined. You comply, you sell. You don't, you don't.
 
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