Trump’s tired of waiting...healthcare across state lines

[JustRalph]

http://www.washingtonexaminer.com/trump-preparing-executive-order-to-let-americans-purchase-health-insurance-across-state-lines/article/2635808

Exec order

[Fager Fan]

Now that is significant.

If people would just give this guy a chance, they'd see that he can and will make positive changes.

[elysiantraveller]

Sounds good until you realize how insurance markets are regulated.

[Track Collector]

Yes, it sounds good, but don't Insurance Companies need to establish a network of providers in the new market area before they can offer policies there, and doesn't that take a long time and/or perhaps a significant amount of financial resources to do?

Maybe it is still a good idea, but realizing tangible benefits are a significant ways down the road?

[Clocker]

Yes, it sounds good, but don't Insurance Companies need to establish a network of providers in the new market area before they can offer policies there, and doesn't that take a long time and/or perhaps a significant amount of financial resources to do?



That is not a legal requirement but it is an economic reality. A company needs the network of providers to keep the costs of care down to compete with established insurers who already have networks in place.

And it is a chicken and egg problem, because care providers aren't going to give an insurer discounts unless it can deliver significant volumes of business.

A number of states already allow companies from other states to offer service, and have for some years. None of those states have yet had an insurance company from another state enter their market.

[Clocker]

Sounds good until you realize how insurance markets are regulated.

Correct. An insurance company located in State A would have to have its rates approved by the state insurance commission in State B before it could sell there. And economically, its rates in State B would be different from those in State A because the rates would have to reflect the different demographics and the costs in State B.

As the New York Times noted last fall, state laws, not federal ones, restrict local insurance competition. Local lawmakers set unique requirements for selling health insurance in their states. But few people who study the health care markets think those local laws are the main reason insurance markets lack competition. Market barriers matter more.

“Selling insurance in a new region or state takes more than just getting a license and including all the locally required benefits,” the Times said. “It also involves setting up favorable contracts with doctors and hospitals so that your customers will be able to access health care.”

Insurance is cheaper in states like Colorado, with relatively young, healthy people. And it costs more in states like Florida, with older residents. Letting a Colorado insurer compete in Florida would not mean the company could offer Sunshine state residents Colorado prices. Nor would it help that Colorado health insurance company offer customers a network of local Florida doctors to choose from.

A handful of states have passed laws to allow out-of-state health insurers to compete in their markets. But a 2012 study published by the Georgetown University Health Policy Institute found that when six states—Maine, Kentucky, Washington, Rhode Island, Georgia, and Wyoming—enacted such laws, they didn’t work. Not a single insurer took the opportunity to sell insurance in any of those states.

http://fortune.com/2016/02/26/donald-trump-marco-rubio-obamacare-fix-flaw/

[Fager Fan]

That is not a legal requirement but it is an economic reality. A company needs the network of providers to keep the costs of care down to compete with established insurers who already have networks in place.

And it is a chicken and egg problem, because care providers aren't going to give an insurer discounts unless it can deliver significant volumes of business.

A number of states already allow companies from other states to offer service, and have for some years. None of those states have yet had an insurance company from another state enter their market.

There shouldn't be a network of providers to start with.

[Clocker]

There shouldn't be a network of providers to start with.

It's called the free market. An insurance company has a network of providers just like Ford Motors has a network of suppliers of car parts.

Without the network arrangements, the costs of health insurance would be a lot higher than they are now.

[Fager Fan]

It's called the free market. An insurance company has a network of providers just like Ford Motors has a network of suppliers of car parts.

Without the network arrangements, the costs of health insurance would be a lot higher than they are now.

Not necessarily. I just had a discussion with a healthcare provider who was going to charge me more for their services if I paid them cash than if I went through insurance. I've been told by other people that they weren't even allowed the option to pay, it had to go through insurance. Where is the sanity in this, and how does this not cause insurance rates to go up?

An X-ray should never be $100 for the cash-paying customer and $75 for the insurance company.

[Clocker]

Not necessarily. I just had a discussion with a healthcare provider who was going to charge me more for their services if I paid them cash than if I went through insurance. I've been told by other people that they weren't even allowed the option to pay, it had to go through insurance. Where is the sanity in this, and how does this not cause insurance rates to go up?



You are talking about the cost of the x-ray, not the cost of the insurance. If the insurance company can get the x-ray cheaper than you can, how does that cause insurance rates to go up? In a competitive market, it allows the insurance company to pass some of those savings on to the consumer, so maybe the insured consumer actually pays $85-90 for the x-ray, figuring in the insurance premiums.

An X-ray should never be $100 for the cash-paying customer and $75 for the insurance company.It should if the insurance company is saving the provider money by cutting the provider's billing, collecting and bookkeeping costs and taking care of some of the provider's government compliance work. The insurance company is getting volume discounts, reflecting cost savings to the provider, just like many products and services in other markets.

[elysiantraveller]

Not necessarily. I just had a discussion with a healthcare provider who was going to charge me more for their services if I paid them cash than if I went through insurance. I've been told by other people that they weren't even allowed the option to pay, it had to go through insurance. Where is the sanity in this, and how does this not cause insurance rates to go up?

An X-ray should never be $100 for the cash-paying customer and $75 for the insurance company.

Honestly because it simply cheaper for them that way. Take a job where a large part of your duties are pulling credit and you'll quickly figure out why. Because you have a regulatory board in the state insuring payment there is no doubt your carrier is paying the bill. There is a significantly higher chance that you'll say you are going to pay cash, they send the bill, and you don't pay it. This means the provider now has to track this open ledger on their books which costs $. Then they will likely sell it to a collection agency, more $. Then, perhaps eventually, you'll settle that debt with the collection agency which costs even more $$.

[chadk66]

Yes, it sounds good, but don't Insurance Companies need to establish a network of providers in the new market area before they can offer policies there, and doesn't that take a long time and/or perhaps a significant amount of financial resources to do?

Maybe it is still a good idea, but realizing tangible benefits are a significant ways down the road?they already have them in place in each state. just a matter of combing things and expanding the network. BCBS is a perfect example. 52 different BCBS companies, all with networks in each state. Each state requiring different policies. Be far more efficient with them being all under one company with a countrywide network.

[Clocker]

Be far more efficient with them being all under one company with a countrywide network.

Different states have different demographics, different health needs, and different costs.

There could be no such thing as a countrywide network. A network consists of providers such as doctors, clinics, and hospitals. Even one insurer in one state would likely have different networks in different parts of the state.

To get back to the original issue, there are currently no federal restrictions on the sale of health insurance across state lines. It is not clear what Trump's proposed order would say or do.

[Fager Fan]

Different states have different demographics, different health needs, and different costs.

There could be no such thing as a countrywide network. A network consists of providers such as doctors, clinics, and hospitals. Even one insurer in one state would likely have different networks in different parts of the state.

To get back to the original issue, there are currently no federal restrictions on the sale of health insurance across state lines. It is not clear what Trump's proposed order would say or do.

I don't see where your next to last statement is true.

This article answers your question:

http://www.aei.org/publication/the-pros-and-cons-of-selling-health-insurance-across-state-lines/

Regarding networks, that was something new as of 30 years or so ago as I recall. I don't know if they're really all that important. I've never gone to someone because they're in my network.

Regulations are part of what makes insurance expensive. I shouldn't have to pay for maternity care or a lot of other things that don't apply to me.

Another thing that drives up insurance prices is using insurance for every little thing. I'd rather have a catastrophic policy, but I don't have that option. If people paid out of pocket for visits costing a few hundred instead of using insurance, then that's a large expense to the insurance companies that could be cut from them and then us.