Selling insurance plans across state lines proves tricky

Some states have opened borders, but payers have yet to sign on

States that want to allow insurers to sell plans across their borders may face an uphill battle.

Proponents of the idea believe it would increase competition among insurers and lower premiums. On the flip side, some worry that if borders open up, states will roll back certain mandated benefits and drop basic consumer protections.

Additionally, insurance commissioners worry that insurers would congregate in states that are less regulated in terms of benefit offerings in order to enroll consumers in other, more highly-regulated states, noted Governing. This, in turn, could destabilize risk pools in more-regulated states.

Georgia, Maine and Wyoming have passed laws that allow out-of-state insurers to sell plans to their residents--but no insurers have cashed in on these opportunities.

So what's holding payers back?

In Wyoming, extremely low population density and the challenge of establishing a provider network has made insurers hesitate, Denise Burke, a senior policy and planning analyst with the state's insurance department, told Governing.

It's possible, however, to make the idea work.

For example, a block of states could pass legislation and open up their markets simultaneously, Thomas Miller, a healthcare fellow at the American Enterprise Institute, told Governing. Federal legislation on cross-state policies is another option, he added. 

Some states aren't giving up hope. After Vermont Gov. Peter Shumlin (D) pulled the plug in December on his plan for creating a single-payer system by 2017, state Sen. Joe Benning (R) is toying with the idea of selling out-of-state plans, and most likely will be pushing the idea this year, added Governing.

For more:
- here's the Governing article

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