health insurance across state lines would not work as advertised and would make
it harder and more expensive for many Americans to access health coverage,
according to a new report released today by the New
America report, entitled, "Across
State Lines Explained: Why Selling Health Insurance Across State Lines is Not
the Answer," found that under across state lines proposals premiums would
increase for many people, health insurance benefits would become less generous,
and more Americans would likely become uninsured over time.
health insurance across state lines would have a devastating impact on the
health insurance marketplace and will not work for many Americans. This
approach fails to introduce the incentives necessary to move insurers to a 21st
Century business model that prioritizes care coordination and high value care
over marketing and underwriting," said Len M. Nichols, Director of the Health
Policy Program at the New America Foundation
and coauthor of the report.
selling health insurance across state lines represents a step backwards not
only for the health insurance marketplace, but also and more importantly for
the American people who struggle everyday to secure quality, affordable
coverage," Nichols continued.
put forth by several Members of Congress and Republican presidential nominee
Senator John McCain, include provisions that would allow Americans to buy and
insurers to sell health insurance across state lines.
State Lines Explained: Why Selling Health Insurance Across State Lines
is Not the Answer
does it mean to allow insurers to sell coverage "across state lines?"
could sell their products to Americans in any state. The insurer would have to
follow the rules and regulations in the state where it is based or "domiciled"
- not the rules of the state where the consumer or policyholder lives.
Allowing the state laws chosen by the insurer rather than the laws of the state
where the consumer lives to govern health insurance regulation is what makes
this policy so controversial.
would selling insurance across state lines impact...
- Premiums? Health insurance premiums may
decrease for many young, healthy individuals. Yet, premiums would
like go up for many other Americans, especially those people with health
conditions or individuals who prefer comprehensive insurance policies.
- Benefit Mandates? Most benefit mandates would be
eliminated by an across state lines proposal. In fact, selling
health insurance across state lines would eliminate any guarantee that
important benefit mandates like maternity care would be included in
insurance packages in the future. Consumers would get little in
exchange - overwhelming evidence shows that benefit mandates per se are
not why health insurance costs so much.
- Access to Coverage?Many people would find it more
difficult to access health insurance if health insurance were sold across
state lines. This is because there would be fewer guaranteed issue
policies and because insurers would have an increased incentive to deny
people coverage and charge people more based on their health history.
would eliminating the tax preference impact the effects of across state lines?
the employer tax exclusion would exacerbate the consequences of an across state
lines marketplace. Fewer employers would offer coverage and millions of
Americans would have to find coverage in the virtually unregulated individual
insurance market. Individuals transitioning from the employer-sponsored system
to the new market would face higher premiums based on their health history and
insurance policies that lack many benefits regularly covered by
high risk pools mitigate the consequences of selling insurance across state
pools that are not exceptionally well funded do not make an across state lines
health insurance marketplace work for all Americans. This is because
across state lines proposals encourage insurers to underwrite aggressively,
which would lead to millions of people being denied coverage and facing higher
premiums based on their health history.
do you make an across state lines market work for all Americans?
across state lines proposal could benefit all Americans in the context of 1)
guaranteed issue and low-income premium subsidies or sufficiently funded high
risk pools, and 2) federal licensure and regulation of insurers.
information visit our blog at www.newhealthdialogue.org
or contact Elizabeth Carpenter at firstname.lastname@example.org.
of the report is also available.