Selling insurance across state lines: What if no one is interested?

A centerpiece of the GOP’s agenda to “replace” ObamaCare is the appealing sounding notion of allowing insurance companies to sell plans across state lines – in other words to ignore state rules about minimum standards of coverage. The hypothesis is that this will provide more competition and therefore lower premiums and enhance service. This one is a real yawner for me. As I’ve said the practical impact is likely to be very minimal – and it seems like a curious abandonment of states’ rights.

Today I read about an odd new law in Georgia, which will let any company with a Georgia insurance license sell plans from other states in Georgia – even plans that “don’t meet minimum standards for coverage in Georgia.” The law goes into force next week. But guess what, not a single company is taking the state up on the opportunity. NPR contacted the biggest health plans in Georgia – including Blue Cross, Aetna, Humana, United and Kaiser – but not one of them would offer a comment.

The sponsor of the law blames uncertainty over the fate of the Affordable Care Act for the lack of uptake. And there could be something to it. But it’s at least as possible that there’s very little interest in the idea in the “free market” itself.

I’m a supporter of the Affordable Care Act but at this point I’m almost hoping it will be overturned just to see how many more zany and impractical ideas (like the Nunes nonsense plan) come out of the woodwork.

 

David Williams blogs regularly at the Health Business Blog.