Imagine a doctor giving advice like this to a seriously ill patient: “There are no studies showing that the treatment I’m recommending will work. In fact, logic and the data that do exist suggest it won’t. It’s just my belief that it might help you, so that’s my prescription.”
Those who would be out the door swiftly and seeking a second opinion ought to apply the same skepticism to a high-profile health policy “cure” recommended Tuesday by President Trump. In his address to Congress, Trump shied away from many health reform details, but he did specifically mention one “solution” that’s long been on Republicans’ wish list — selling health insurance across state lines.
Trump’s mention drew loud cheers from the GOP side of the chamber. It shouldn’t have. Few in health care think this is a serious proposal to address the individual health insurance market’s key problems — soaring premiums and lack of competing plans. The small individual health insurance market (roughly 5 percent in Minnesota) is where people buy coverage on their own if they don’t get it from employers or through popular, government-run programs such as Medicare.
The at-first-glance appeal of the across-state-lines proposal is its simplicity. Right now, health insurance is regulated at the state level. Among other things, states oversee coverage requirements, provider network adequacy and plans’ financial soundness. Across-state-lines advocates believe that allowing insurance companies from states with less regulation to sell in states with stronger consumer protections (such as Minnesota) will bring down the price of coverage and increase consumer choice. The trouble, as Trump acknowledged this week, is that health care is incredibly complex. Plans that offer cheaper premiums by reducing the types of conditions covered could result in many consumers becoming ill and finding out their insurance is inadequate. That could leave them unable to pay their bills. In turn, hospitals may wind up once again with huge uncompensated care costs.
Those who buy reduced-benefits coverage would also likely be young and healthy, while those with serious medical needs would need more comprehensive coverage. Without healthy people to spread out care costs, these more robust plans’ price would soar, leaving the medically needy priced out of the market.
What limited experience the nation does have with across-state-lines sales suggests it won’t work. A 2012 Georgetown University Health Policy Institute report scrutinized six states that have enacted this type of reform, finding that it “did not result in a single insurer entering the market or the sale of a single new insurance product.” Nor did it reduce coverage costs. “Our findings suggest that across-state-lines legislation does not appear to be the ‘silver bullet’ that proponents are searching for,” the report’s authors concluded.
Among the possible explanations: The relatively small number of individual market enrollees may be insufficient incentive for insurers to expand and do the hard work of lining up local provider networks.
State and federal lawmakers need to jettison the “across-state-lines” rhetoric. It’s a talking point, not a real solution.