Proponents of sales across state lines believe that varying state rules and regulations create substantial barriers to competition, resulting in decreased access to affordable health insurance for consumers. Selling insurance across state lines would create a national market, which would provide increased choices for consumers, encourage competition, and, ultimately, lower costs for everyone. The development of a national interstate health insurance marketplace has become a highly political issue and has been endorsed by many Republicans, including President Donald Trump and Speaker of the House Paul Ryan. The Cato Institute supports the concept and believes that it could reduce insurance premiums by 13%.
7 The Heritage Foundation also supports the idea, believing state-led health initiatives can spur innovation, decrease cost, and increase competition.
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Opponents cite that health care is, by its nature, a local service, and the process of setting up networks of health care facilities and providers across state lines is costly and makes selling plans across state lines highly impractical. State regulators have the ability to develop policies to regulate and oversee plans sold within their borders. The National Association of Insurance Commissioners feels that deregulation could result in an eroding of consumer protections offered by state policies.
9 If interstate plans were developed, there could be a “race to the bottom,” in which insurance companies would choose to operate out of states that had the least restrictive regulations, resulting in plans with minimal coverage and fewer consumer protections. Families USA cited concerns about decreased consumer protection, deregulation of the health insurance industry, a proliferation of lower-quality insurance plans, and segregation of the risk pool.
10 People who would select minimal-coverage plans would likely be younger and healthier than people in need of more comprehensive coverage. The overall risk pool could become segregated, resulting in increasing costs for older and sicker persons who need more comprehensive policies. Health insurance organizations have been fairly subdued in their endorsement of proposals to sell across state lines. America's Health Insurance Plans, the lobbying agency for many private insurance companies, has not endorsed selling health insurance across-state-lines, and neither has the Blue Cross Blue Shield Association.
11 Critics express concerns that selling health insurance across state lines might ultimately decrease competition, as such a system would be a disadvantage to companies that offer more than basic coverage.
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