Wednesday, October 22nd, 2014

GOP Pledge-O-Meter

Allow purchase of health insurance across state lines


Will "allow individuals to buy health care coverage outside of the state in which they live."


Updates

No progress on Republican bill

Republican lawmakers sought to pass a law to allow people to buy insurance outside the state where they live with the idea it would increase competition and drive down prices.

"Republicans support the idea because they believe one reason health care costs are high is that some states impose too stringent regulation on insurers; if their state residents can shop for cheaper coverage from out-of-state insurance, they argue it will promote competition, enhance choice and reduce costs,” said Jonathan Oberlander, a health policy professor at the University of North Carolina School of Medicine.

Democrats, on the other hand, take a skeptical view of lower regulation.

"They worry about a race to the bottom; insurers selling inadequate insurance plans that evade state regulations and that skim off the healthiest customers, making everyone else's insurance more expensive,” Oberlander said.

Interestingly, the health care law allows sales of insurance across state lines, but it happens only if insurers adhere to stricter regulation.

According to the Urban Institute, a think tank focusing on poverty and social issues, the law "requires all states to comply with a minimum level of insurance regulation, and cross state sales would not be permitted in a state unless that state affirmatively joined a compact with one or more other states.”

Oberlander added that it's unclear how many states will choose to set up such compacts.
   
Meanwhile, Blackburn's bill in the House hasn't moved in more than a year. It was referred to a subcommittee in February 2011 and has withered on the vine.

Allowing the purchase of health insurance across state lines is now the law of the land, at least in the form Democrats favor it. House Republicans have a different version, but they've taken no action on their own bill.

We rate this a Promise Broken.

Sources:

Urban Institute, "Does the Patient Protection and Affordable Care Act Permit the Purchase of Health Insurance Across State Lines?

THOMAS, H.R. 371, accessed Nov.2, 2012

Email interview with Jonathan Oberlander of the University of North Carolina-Chapel Hill, Nov. 2, 2012

House bill on selling insurance across state lines will have to overcome divided government

House Republicans have introduced a bill that would allow health insurance to be sold across state lines, as part of their proposals to repeal the Democratic health care law and implement their own proposals.

Sponsored by Rep. Marsha Blackburn, R-Tenn., the Health Care Choice Act of 2011 would repeal major parts of the health care reform bill and "generally allow individuals to purchase health coverage licensed in other states if the insurer meets solvency standards and provides independent external appeals procedures for benefit disputes," according to a committee summary.

A House subcommittee held a hearing on the matter in May. Rep. Fred Upton, R-Md., chairman of the House Energy and Commerce Committee, said the legislation would help consumers in states that put too many requirements on health insurers. 

"Consumers are forced to buy a Cadillac health plan; they aren't even given the option of something that better fits their needs," Upton said in a prepared statement. "As a result, many individuals choose to go without any health coverage because of these costly mandates."

A representative from President Barack Obama's administration said that the 2010 health care law already allows for insurance plans to be sold across state lines. "The Affordable Care Act allows health care to be sold across state lines when both states agree and consumer protections are maintained," said Steven Larsen of the Centers for Medicare and Medicaid in his testimony. "Without the consumer protections included in the Affordable Care Act, we run the risk of creating an environment where there is a 'race to the bottom' in which insurers have an incentive to sell plans from the state with fewest consumer protections."

We weren't able to find any specific comments from the Obama administration on this bill. But because it would overturn large portions of the president's signature health law, it seems like the president would veto the bill, even if it were able to pass the Senate. The White House has formally stated it would veto other bills that attempted to overturn the health care law.

In summary, the House Republicans have introduced legislation to allow the sale of health insurance across state lines. But it hasn't received a vote from the full House. Even if it does pass the House, it seems unlikely that it will become law, given that Democrats control the Senate and the presidency. We rate this promise Stalled.

Sources:

U.S. House of Representatives, Committee on Energy and Commerce, Committee hearing: "Expanding Health Care Options: Allowing Americans to Purchase Affordable Coverage Across State Lines," May 25, 2011

U.S. House of Representatives, Committee on Energy and Commerce, Internal memorandum, summary of H.R. 371, May 23, 2011

THOMAS, H.R. 371, accessed Aug. 8, 2011

U.S. House of Representatives, Committee on Energy and Commerce, Committee hearing: opening statement of Rep. Fred Upton, May 25, 2011
 
U.S. House of Representatives, Committee on Energy and Commerce, Committee hearing: statement of Steven Larsen of the Centers for Medicare and Medicaid, May 25, 2011