- Jun 6, 2007
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Congress in its HealthCare Reform Bill is missing a great opportunity to create a market force to suppress health insurance premium costs if it doesnt allow American consumers to purchase health insurance in neighboring states. The present requirement where consumers can only purchase health insurance from insurers licensed in those consumers home state is outdated. Opening it up to just neighboring states will increase competition amongst insurance companies thus creating a market force pushing to lower insurance prices plus it will increase the size of the pools of insurance customers thus allowing for larger beneficiary pools for an insurance company which will allow them to spread insurance claim risks over a larger number of people and thus offer lower insurance prices. This step by Congress would also ameliorate the problem often heard in the media made by members of the general public which is they have a paltry number of health insurance plans to choose from.
If one looks at the reasons why the nation would want to have an in-state requirement for purchasing health insurance in light of the benefits offered by the healthcare reform legislation being proposed in Congress, one should conclude the in-state requirement isnt really needed. One reason for having the in-state requirement is that current federal law doesnt offer good consumer protections when it comes to health insurance so American consumers need the protections that the state mandates provides.
This reason doesnt have merit when one considers all the consumer protection mandates in the health care reform legislation, the protections in the reform legislation are comprehensive and stellar that is not to say that Congress shouldnt worry a hell of a lot more about how all the reform mandates are going to raise insurance premium prices and decide to phase in over eight years the mandates on out of pocket expenses (make two out of pocket expense limits one for drugs and one for non-drug medical expenses and the latter one phase in) and the mandate for free preventive care. Having an in-state rule insures insurance companies will be available and cooperative with litigation, specifically from consumers who need to have their rights vindicated. Allowing consumers to buy insurance in neighboring states will not materially hurt consumers rights in being able to sue insurance companies, these neighboring states health insurance licensing authorities will still provide the force to get health insurance companies to cooperate in litigation it is too much in these neighboring states interests not to look out for their neighboring states consumers. Another reason to have the in-state requirement is that health insurance companies are often big employers in a state so the logic goes that if the government allows consumers to buy health insurance out of state the in state insurance companies could lose all their customers and then be force to lay off employees and states dont want to lose jobs. Today, though most states have an abundance of their citizens work in a neighboring state, so nullifying the in-state rule and allowing consumers to buy insurance in a neighboring state in a worse case scenario will only be moving jobs to a neighboring state not a crushing economic phenomenon. Moreover, the nation is in such a crisis over health care insurance in America at this time that government, political, civic and business leaders have to conclude that the top priority at this time with the whole Health Care Problem in America is to provide Americans with affordable health insurance not job creation or job preservation; therefore, Congress should replace the in-state requirement with a neighboring state permission requirement.
Creating the groundswell of political support to implement a neighboring state requirement will require Republicans to be big people and endorse this modest proposal. It is well known that the main tenet of the Republicans healthcare reform is to allow the American consumers to buy health insurance from any insurance company selling insurance in America. Although there would be benefits in implementing such a change, the negative consequences could be enormous and catastrophic. Not only could the negative consequences include enormous job losses in a region, problems with health care providers dealing with insurance issuers where there is a long distance between them and effectiveness of local court systems to vindicate consumers rights, etc. but what happens when the nation has these mega insurance companies that would likely result and they make an underwriting mistake or go bankrupt who pays the consumers medical claim who had health insurance with this in trouble mega insurance company?
If one looks at the reasons why the nation would want to have an in-state requirement for purchasing health insurance in light of the benefits offered by the healthcare reform legislation being proposed in Congress, one should conclude the in-state requirement isnt really needed. One reason for having the in-state requirement is that current federal law doesnt offer good consumer protections when it comes to health insurance so American consumers need the protections that the state mandates provides.
This reason doesnt have merit when one considers all the consumer protection mandates in the health care reform legislation, the protections in the reform legislation are comprehensive and stellar that is not to say that Congress shouldnt worry a hell of a lot more about how all the reform mandates are going to raise insurance premium prices and decide to phase in over eight years the mandates on out of pocket expenses (make two out of pocket expense limits one for drugs and one for non-drug medical expenses and the latter one phase in) and the mandate for free preventive care. Having an in-state rule insures insurance companies will be available and cooperative with litigation, specifically from consumers who need to have their rights vindicated. Allowing consumers to buy insurance in neighboring states will not materially hurt consumers rights in being able to sue insurance companies, these neighboring states health insurance licensing authorities will still provide the force to get health insurance companies to cooperate in litigation it is too much in these neighboring states interests not to look out for their neighboring states consumers. Another reason to have the in-state requirement is that health insurance companies are often big employers in a state so the logic goes that if the government allows consumers to buy health insurance out of state the in state insurance companies could lose all their customers and then be force to lay off employees and states dont want to lose jobs. Today, though most states have an abundance of their citizens work in a neighboring state, so nullifying the in-state rule and allowing consumers to buy insurance in a neighboring state in a worse case scenario will only be moving jobs to a neighboring state not a crushing economic phenomenon. Moreover, the nation is in such a crisis over health care insurance in America at this time that government, political, civic and business leaders have to conclude that the top priority at this time with the whole Health Care Problem in America is to provide Americans with affordable health insurance not job creation or job preservation; therefore, Congress should replace the in-state requirement with a neighboring state permission requirement.
Creating the groundswell of political support to implement a neighboring state requirement will require Republicans to be big people and endorse this modest proposal. It is well known that the main tenet of the Republicans healthcare reform is to allow the American consumers to buy health insurance from any insurance company selling insurance in America. Although there would be benefits in implementing such a change, the negative consequences could be enormous and catastrophic. Not only could the negative consequences include enormous job losses in a region, problems with health care providers dealing with insurance issuers where there is a long distance between them and effectiveness of local court systems to vindicate consumers rights, etc. but what happens when the nation has these mega insurance companies that would likely result and they make an underwriting mistake or go bankrupt who pays the consumers medical claim who had health insurance with this in trouble mega insurance company?
