The Problem With the GOP’s Interstate Obamacare Alternative

Margot Sanger-Katz: “The idea of developing a more national market for health insurance has become a major part of Republican health reform orthodoxy … Aside from repealing Obamacare, allowing insurers to sell their products across state lines appears to be the most popular health reform idea among the G.O.P. candidates.”

“The trouble with the idea is that varying or numerous state regulations aren’t the main reason insurance markets tend to be uncompetitive. Selling insurance in a new region or state takes more than just getting a license and including all the locally required benefits. It also involves setting up favorable contracts with doctors and hospitals so that your customers will be able to access health care. Establishing those networks of health care providers can be hard for new market entrants.”

“’The barriers to entry are not truly regulatory, they are financial and they are network,’ said Sabrina Corlette, the director of the Georgetown University Health Policy Institute.”

“Critics of the across-state-lines plan worry about negative consequences of letting insurers shop for the state regulator of their choice … Insurers may end up congregating in whatever state offers the most lenient regulations. That could mean that customers who get sick could be harmed because there are few comprehensive policies available, or because consumer protections are weak when things go wrong.”

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  • pisher

    Nobody in the Republican Party really cares if the new system works or not–what they care about is getting rid of Obamacare without being seen as having taken health insurance away from millions of people.

    Trump’s motives might not be even that deep–he just wants to change it enough so he can call it Trumpcare.

  • CaptainCommonsense

    “Selling insurance across state lines” means everyone will have a choice of dirt-cheap policies from North Dakota or Texass or some other no-regulation shithole that won’t be worth the price of the paper they’re printed on because they won’t cover a damn thing.

    That’s all it’s ever been about, letting all of the insurers crowd into the same two or three states where they can get the most money while giving the least service.

    • pisher

      Except the insurers themselves don’t seem to be that interested in doing this. Their nature is to want as many people covered as possible–the largest possible pool. What this does is let fly-by-night competitors steal away the young healthy people who don’t think they’ll ever get sick or hurt, and want to free up their income to engage in activities that will lead to them getting sick or hurt. This is not what most of the insurers want.

      What Obamacare was about was getting the insurance companies onboard with healthcare reform, and it succeeded.

    • Silent_Partner

      Bingo. Pretty much what the credit card industry does now.

  • Silent_Partner

    You know, because that’s worked so great with credit cards, lol.

    • Calbengoshi

      It’s all a matter of perspective. Allowing credit card companies to operate under the laws of the state in which a company’s principal office is located without having to comply with certain laws of the state in which a credit card holder resides has worked out very well for the companies. It’s only the card holders who have suffered.

      • Silent_Partner

        Yep, which was my point of how this would go with health insurers all congregating in a handful of states and screwing the consumers.

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