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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