Thread: Health plans, regulators pan Trump's plan to allow purchase of insurance across stat

Health plans, regulators pan Trump's plan to allow purchase of insurance across state lines

The idea has failed in several states where it's been tried.

By PAUL DEMKO and NOLAN D. MCCASKILL
09/27/2017 01:51 PM EDT
Updated 09/27/2017 05:19 PM EDT

President Donald Trump on Wednesday said he will likely sign an executive order allowing Americans to purchase health care across state lines.

But the idea is broadly opposed by state insurance commissioners, consumer advocates and insurers, and has failed in states where it's been tried.

“I’ll probably be signing a very major executive order where people can go out across state lines, do lots of things and buy their own health care, and that will be probably signed next week,” Trump told reporters on Wednesday afternoon. “It’s being finished now. It’s gonna cover a lot of territory and a lot of people — millions of people.”

Trump’s remarks revived a theme from his presidential campaign and came a day after the collapse of Senate Republicans’ efforts to repeal Obamacare with a simple majority.

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Trump didn't elaborate on how he would allow insurance to be sold across state lines. But most insurance experts find it hard to imagine how an executive order could supplant existing state regulations, and believe such a move would likely spark a legal challenge.

“Health insurers already have the ability to sell insurance in multiple states as long as they comply with state consumer protection and licensing laws, which many already do,” said Mike Consedine, CEO of the National Association of Insurance Commissioners, in a statement to POLITICO. “The NAIC has long been opposed to any attempt to reduce or preempt state authority or weaken consumer protections.”

Several states — including Wyoming, Maine and Georgia — have already tried allowing across-state sales, and it’s been a colossal bust. The chief reason: There’s been zero interest from insurers. That’s in part because creating competitive provider networks in states where they don’t have any current customers is incredibly difficult.

In addition, insurers in states with tough regulations are fearful of having to compete against out-of-state plans that don’t have to adhere to the same rules.

“My insurers here absolutely cringe when you talk about across-state sales,” said Washington Insurance Commissioner Mike Kreidler, a Democrat.

Kreidler said he didn't know how an executive order could ever be binding on a state. “I just can’t imagine it having that kind of impact. State law is going to supersede an executive order.”

Trump and other Republicans have long touted sales across state lines as a sure-fire way to bolster competition and drive down prices. The Affordable Care Act allows states to form compacts to test the concept.

But state insurance commissioners — even Republicans — health plans and consumer advocates warn that without strong federal standards, as currently exist with Obamacare, it would likely lead to a "race to the bottom" with insurers flocking to the states with the least stringent rules. Skeptics also worry that there wouldn’t be any accountability for insurers that engage in shoddy business practices if state regulations are stripped away.

“I do not believe that state insurance commissioners, nor state legislatures or governors, will look kindly to anything that would pre-empt our ability to protect our consumers,” said Maryland Insurance Commissioner Al Redmer Jr., a Republican appointee.

But Sen. John Kennedy (R-La.) argues that taking away states' rights to regulate their insurance markets is just what's needed to spur competition.

"If I see a plan in Arizona that I want to buy, I ought to be able to buy,” Kennedy said. “What's going on right now is you have these little fiefdoms in each state where the insurance commissioners want to keep control."

Adam Cancryn contributed to this report.

http://www.politico.com/story/2017/0...e-lines-243213

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