Just like the leaves turning colors in the Fall, someone predictably come up with a supposedly great idea: let consumers buy health coverage from insurers across state lines.
The argument is always the same: Interstate sales increases competition and reduces costs for consumers. This sounds workable on paper. The latest go-around was raised in this past week’s presidential debate as the fall leaves tumbled — just like consumer protections.
Problem is, interstate sales open the door wide for fraud, and water down consumer protection. And, most people advocating this system usually don’t include important and necessary protections when pushing their interstate plans.
Yes, neighboring states can legally create partnerships that allow insurers to cover consumers in any state within the partnership. Yet partnerships have strict, built-in legal protections when states agree to work together. Insurance regulators know who’s doing business. Networks also offer consumers choices of doctors and facilities.
These protections and coverages may not exist under a blanket permit for consumers to buy coverage in any state.
Consumers don’t know what insurance regulator to reach for help. And would the regulator in the state where the consumer lives have much incentive to help if the health insurer is domiciled another state? Would the regulator where the insurer is domiciled help a consumer living in a different state?
We already see crooks peddling bogus health insurance to unsuspecting consumers and small businesses. This problem would be magnified if interstate sale of health insurance was allowed without strict and well-defined oversight.
Insurers must be state-licensed to do business in a given state. How can state oversight properly protect consumers if anyone can offer insurance to any consumer in any other state?
Who makes certain the insurer is solvent and can do business in another state? And, would an insurer in one state have an adequate network of doctors, hospitals and pharmacies to cover the health needs of consumers in another state?
These questions are raised every time interstate health-insurance sale is broached. Yet we never hear answers — just the simplistic nostrum that interstate sales will help reduce healthcare costs.
Don’t just spoon out more words like falling autumn leaves — prove that consumers would be better protected.
About the author: Howard Goldblatt is director of government affairs for the Coalition Against Insurance Fraud.