While announcing the proposal of association health plans amongst small businesses, the Trump Administration is also aiming to facilitate health insurance policies across state lines. The rule will allow insurance companies to sell plans across state lines. The goal is to be able to provide plans and coverage that cost less.
Trump stated “I have private insurance companies coming and will sell private health care plans to people through associations. That’s going to be millions and millions of people. People have no idea how big that is. And by the way, and for that, we’ve ended across state lines. So we have competition.”
The issue that Trump is referring to is the state regulations that each state has. Each state differs in the requirements of what must be covered by insurance companies.
The association health plans would be considered under the federal law that allows large employers the freedom from state regulation. This way, these health plans can be sold across state lines.
Issues that lies with these plans are the fact that they can surpass the ACA’s requirement of providing the 10 essential benefits such as maternity care, mental health care, and emergency services to name a few. This allows the plans to offer fewer benefits, therefore costing much less. But the association plans cannot discriminate or overcharge individuals with pre-existing conditions.
These health plans can be structured across state lines, giving them the opportunity to market anywhere in the country. They may also set up to serve communities, or span several states. However, pricing is uncertain whether people in Manhattan will be priced the same as those in Texas.
“We are concerned that this could create or expand alternative, parallel markets for health coverage, which would lead to higher premiums for consumers, particularly those with pre-existing conditions,” according to a letter last month to state regulators, signed by America’s Health Insurance Plans and the Blue Cross Blue Shield Association. “Further, these actions destabilize the health insurance markets that guarantee access to comprehensive health coverage regardless of health status.”
Pennsylvania’s acting insurance commissioner, Jessica Altman, voiced her opinion on the matter. “Generally speaking, these types of plans are exempt from state law and outside my jurisdiction,” Altman stated. “That means any issues that consumers have, I won’t be able to help them. More and more people would fall under the jurisdiction of the federal government, and I think state regulators would say we really do it better.”
The opportunity for health insurance plans to be sold across state lines will have an impact on the market. People will be able to purchase less comprehensive plans at a cheaper rate. But this can cause customers with extensive health issue or needs a hard time finding affordable plans. Healthier individuals will leave the marketplace for the skimpier non-regulated health plans, which will create a rise in premiums for those who need it- the sick.
Details on the rule must still be worked out by Congress and voted on, but if passed, it will change the health insurance market.