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Selling health insurance across state lines Good / Bad ?
President Trump signed an executive order today to trying to change the way health insurance is regulated, designed, governed and purchased. His plan covers three main areas hoping to spur competition, reduce regulations and lower health insurance costs for millions of Americans.
Selling Health Insurance Across State Lines
Trumps first act will allow insurance companies to sell health insurance policies across state lines. This has been attempted for years and will be the first true test if insurance companies are willing to try. Until now, each state has their own insurance department that makes specific rules to govern their state. This will presumably allow a carrier to set up a policy in one state and sell it across the country using the home states rules and regulations. It also allows the carriers to exclude some of the ACA protections that have increased costs for the healthier population while benefiting those with pre-existing conditions. Will it work, see the attached article from Milliman discussing the intended and untended consequences. There are many things that can go wrong but hopefully it will create options and more competition. This will be a challenge for regional carriers like BlueCross Blue Shield of Tennessee as they don't have national PPO networks like Cigna, Aetna or United HealthCare.
Association Health Plans
This is another program that has been discussed for more than 20 years. There have been several examples during my career but each time they crash and burn as those who can get coverage cheaper leave the association plan to set up their own. This creates a less and less healthy group increasing premiums and ultimately failing. I do believe this will result in numerous options for small business owners and now it appears individuals will be able to sign up as well. More options, which is something thing we have not had for many years. My fingers are crossed because we need help to create competition and bring down costs. Again, because they will not have to comply with many of the rigorous ACA laws of community rating, no pre-existing conditions and other mandates, there will be winners and losers.
The ACA strictly limited how long an individual could keep a short term health insurance policy and what they were required to cover. These were affordable options for those in between jobs, just out of school or looking for an affordable health care option. That all went away and it would be nice to see “good” short term coverage return as an option for those in specific circumstances. Not intended to replace a normal individual or group policy they do serve a purpose in keeping people insured.