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    Some dream of payers without borders, but obstacles remain

    The interstate health insurance sales sought by the Trump administration could change how primary care physicians are reimbursed and how they deal with private payers, but there are significant challenges to it ever becoming law.

     

    Further reading: 8 ways to combat politics in the exam room

     

    Interstate sales could mean independent physicians and healthcare provider networks would have more choices about which private payers they contract with, but they also could find themselves dealing with out-of-state regulators.  

    During last year’s campaign and since taking office, President Donald Trump has pushed for interstate insurance sales, calling it an essential part of repealing and replacing the Affordable Care Act (ACA), and promising it would lead to more affordable insurance. 

    At first glance, it seems logical that one large, nationwide market would be more efficient than 51 smaller ones (Washington D.C. is its own.) Competition would drive down prices and people would have a better chance of finding  plans specific to their needs. 

    By having to comply only with regulations in the state where it is headquartered, insurers would have lower administrative costs and, presumably, could pass the savings on to consumers.

    However, five states already allow out-of-state health insurers to sell coverage within their borders, but no insurance providers have done so. And that highlights a fundamental problem with the policy—it’s far more popular with politicians than it is with the healthcare and insurance industries. 

     

    Blog: Is healthcare a collective right or individual privilege? 

     

    “It doesn’t matter what the federal government does [about deregulation]. It just doesn’t make business sense,” says Joseph Antos, Ph.D., MA, a health policy expert at the conservative think tank American Enterprise Institute (AEI), and former assistant director for health and human resources at the Congressional Budget Office.

     

    Federal exemption and state control

    Insurance regulation has been a state responsibility for more than 70 years.

    In 1945, the McCarran-Ferguson Act exempted insurance companies from parts of federal antitrust law and made individual states the primary regulators of insurance. It was done to allow insurers to share information so they could better project future losses and set prices accordingly.

    The effect is that insurance companies must register in each state in which they do business, and any products they sell in that state are regulated by that state’s insurance department.

    Individual states set their own insurance requirements to which companies must adhere. Though companies like Aetna and Anthem operate in multiple states, their offerings in each state must follow the rules of those jurisdictions. In other words, they can’t sell an Iowa-regulated policy in
    Illinois.

    Critics of the antitrust exemption say it has produced highly concentrated health insurance markets in the states, many of which are dominated by one or two large carriers.

    In addition, they say, states have done a poor job of policing the industry and protecting consumers from abuses, such as reduced coverage and price fixing. Finally, they like to point out that Major League Baseball is the only other industry that enjoys such an extraordinary antitrust exemption.

    Next: Understanding the effects of degregulation

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    • Anonymous
      Payment without borders???? Easy money, easy comes, easy goes...
    • Anonymous
      Payment without borders???? What about bank transfers, credit cards, PayPal, and so on...? Or it refers to: 'boarders', being too expensive for health insurers, and expelled from systems? Why I do remember 'Soylent green' and the 'Gas chambers'?
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